Mohamed al Fayed's barrister has accused the most senior policeman in Britain at the time of Diana, Princess of Wales' death of being part of a murderous conspiracy.
Michael Mansfield QC suggested former Metropolitan Police Commissioner Lord Condon deliberately covered up evidence because he knew Diana had been killed because of the activities of "British state agencies".
Lord Condon told him the allegation was "abhorrent" and "disgusting", saying it amounted to calling him a murderer.
The extraordinary exchange happened during cross-examination at Diana's inquest about the so-called "Mishcon Note". The now-famous document records a meeting with Diana's lawyer Lord Mishcon in 1995 at which she spoke of fears of a car crash.
Lord Mishcon, who has since died, handed the letter to Lord Condon 18 days after the 1997 crash in Paris in which Diana was killed, with Dodi Fayed and driver Henri Paul, the High Court inquest heard. But it was not passed on to the Royal Coroner Michael Burgess until 2003 after a similar letter was made public by Diana's former butler Paul Burrell, the jury were told.
Mr Mansfield put it to Lord Condon that he had a legal duty as early as 1997 to pass on anything "germane" to the case to the relevant coroner. Lord Condon said that had not been how he viewed it at the time.
But Mr Mansfield persisted, saying: "I'm going to make it plain to you, Lord Condon, that the reason why potentially relevant material was not handed to the coroner immediately, and in fact not at all, until Paul Burrell put his letter in the public domain ... was that you were sitting on it knowing that something had gone wrong in Paris linked to the work of British state agencies."
The coroner Lord Justice Scott Baker interrupted asking: "You are suggesting, are you, that Lord Condon was part of a criminal conspiracy?"
Mr Mansfield said: "Yes."
Lord Condon replied: "That is about the most serious allegation that could ever be made of someone in my position and I totally refute it as a blatant lie."
