Dublin businessman Mr Tom Forde has denied allegations that he demanded half the $400,000 (€429,000) commission earned by a Dublin man and his British partner for laundering £4.5 million (€5.7 million) through Swiss banks.

One of the defendants told the trial in Lugano, Switzerland, yesterday that Mr Forde threatened the two men at a meeting in Dublin on December 1st, 1998.

Mr Paul Murphy (40) of Bray, Co Wicklow and British businessman Mr Andrew Winters (47) are accused of knowingly laundering money that financed drug dealings through Switzerland. The men admit laundering the money but deny they knew its source.

"Mr Forde thought he was being cut out of the business and said he wanted half of Murphy's business," said Mr Winters, referring to half the estimated $200,000 commission Mr Murphy received for laundering money. Mr Forde also demanded a half of Mr Winters's own commission for introducing him to Mr Murphy, Mr Winters told the court.

Mr Forde denied the allegations yesterday evening. "I have never done business with Mr Winters and had only limited business with Mr Murphy," he told The Irish Times by telephone from Dublin.

Mr Winters told the court that, when the three men reached no agreement, the meeting broke up as Mr Forde began making threats. Mr Forde said the meeting never took place and said he was puzzled by Mr Winters' allegations.

"It is very difficult to know why he is doing this or anything," he said.

Mr Forde declined an invitation to appear at the money laundering trial earlier this week citing ill health. He was to have been questioned about allegations that he worked as an undercover agent for the US Drug Enforcement Agency (DEA), the US Inland Revenue Service and the US Customs and Excise.

He declined to discuss these allegations last night.

He also declined to elaborate on his role as co-trustee with Mr Murphy of the Irish-registered "Hibo" trust. The "Hibo" trust held $6 million for two German businessmen, one of whom allegedly embezzled it from a German company. The money was transferred from a bank in Geneva to the Colombian Banco Andino and was then to have been transferred to Citibank in New York but it never arrived.

"The money never reached New York - the case is still in litigation - but someone was very negligent somewhere along the way," Mr Forde said. He says this was his only business dealing with Mr Murphy, whom he says was introduced to him by a mutual friend as a banker from the Standard Charter Bank of Hong Kong and Singapore.

Mr Murphy and Mr Winters admit they brought 21 caseloads of banknotes into Switzerland from the US, Britain and Italy. The money, totalling £4.5 million, was later transferred back to the US, where prosecutors suspected the funds were transferred to Colombia. But both men say they know nothing of the source of the cash.

At the trial in Lugano yesterday, state prosecutor Ms Maria Galliani showed how contacts of the two defendants were involved in the trafficking of Colombian cocaine, a trade in which she alleges the two defendants were knowingly involved.

Mr Murphy opened two bank accounts with the General Star Corporation of Uruguay in February 1995. In one six-week period, more than $105 million passed in and out of these accounts. Another account-holder of the same bank linked with Mr Murphy, Mr Kevin Hanley, was arrested by British police in 1998 with 29kg of cocaine, worth £2 million, in the trunk of his car.

The arrest was part of a larger operation, Operation Extend, that uncovered a massive cocaine trafficking operation from Colombia.

Prosecutors in Switzerland are trying to prove that Mr Murphy and Mr Winters were knowingly involved in laundering money from this operation.

The trial is one of the largest in Swiss history and has been full of twists. Yesterday's came when Mr Winters was revealed as a failed jewel smuggler. He said he paid $7,000 expenses to an anonymous contact in Venezuela, who had agreed to smuggle emeralds to him in Switzerland. However Mr Winters was arrested and imprisoned before the emeralds arrived.

The trial is expected to last at least another week.