Businessman Philip Chiyangwa - a senior member of the ruling ZANU-PF party - was arrested some two weeks ago and faces charges of contravening Zimbabwe's Official Secrets Act.
His lawyers sought on Thursday to have the charges against him set aside, arguing that there was no basis for them. Details of the case have not been made public.
"The application for refusal of remand has been dismissed. The application for bail has also been dismissed," State Prosecutor Morgen (sic) Nemadire told journalists after a court hearing from which both the media and the public were barred.
Defence lawyers have declined to comment on the case, citing a court order barring them from speaking to the press.
Also charged in the case are Zimbabwe's new ambassador to Mozambique, Godfrey Dzvairo, ZANU-PF external affairs director Itai Marchi, deputy security director Kenny Karidza and Tendai Matambanadzo, a former official at a local commercial bank.
Harare's magistrate was hearing a separate application on Friday by Dzvairo, Marchi and Matambanadzo to withdraw their initial guilty pleas in the case, court officials said, while Karidza was due in court on January 7.
On Thursday the official Herald newspaper said the men could face jail terms of up to 20 years if convicted, but gave no details of the case against them.
It was the second arrest this year for Chiyangwa, a ZANU-PF legislator and party chairman in Mashonaland West province. He was detained in January on charges of interfering with a fraud probe and threatening a policeman investigating the case.
Chiyangwa was later cleared of the charges, which his lawyers linked to feuding within the ruling party over who should succeed Mugabe, expected to retire in 2008.
The succession row has flared up in recent weeks, with seven top ZANU-PF officials suspended and accused of convening an unsanctioned secret meeting to push Parliament Speaker Emmerson Mnangagwa's candidacy for the post of party vice-president, seen as a stepping stone to the top job.