Christodoulos Xiros, 56, of the Marxist militant group November 17, was arrested on January 3 in Anavyssos.
He went missing after being allowed out of jail in January to visit his family.
Police found a cache of arms and ammunition in his house in Anavyssos, including a grenade launcher.
The cache also had eight Kalashnikov rifles, three handguns, a silencer and explosives.
Police said they also found drawings of the planned attack.
Police chief Dimitris Tsaknakis said: “The findings point to a big hit on the Korydallos prison, aiming to free prisoners. Based on notes we found, the attack would have taken place in the next days.”
Public Safety Minister Vassilis Kikilias said: “Greek police prevented a major attack against the heart of the Greek prison system.”
Christodoulos Xiros, who was sentenced in 2003 to multiple life terms for his role in November 17, appeared in court on January 4 to face charges of running a terrorist group and possessing weapons.
While on the loose, Christodoulos Xiros had appeared in a video threatening armed action over austerity measures undertaken under Greece’s international bailout.
Photos released by Greek police show Christodoulos Xiros with a beard and his hair grown long and dyed blonde.
The now defunct November 17 emerged in the mid-1970s and claimed a series of deadly attacks against foreign diplomats and Greek politicians and businessmen over nearly three decades, killing at least 23 people.
Greece, which has a huge foreign debt, has gone through years of austerity programs mandated by the IMF-EU bailout.
Greece is due to hold a snap election on January 25.
The left-wing Syriza party – which wants the terms of the EU-IMF bailout renegotiated – is leading in opinion polls.
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