Sanader is charged with having taken 10 million euros as kickbacks from MOL executives in order to enable this Hungarian oil group to have a dominant position in INA and to divest the gas business from the Croatian company.

Dragic, a substitute member of the task force, who replaced Finance Minister Ivan Suker at this body's sessions, said that the task force had not at all concrete instructions for its activities and at the two meetings which he had attended there had been no representatives of INA or MOL.

Apart from Polancec, other state officials Drazen Bosnjakovic, Igor Lucic and Vedran Duvnjak as well as lawyer Zoran Markovic, who was paid for his work in the task force, were present at those meetings

The lawyer Markovic is one of the defendants, together with Polancec, in the trial which the Zagreb County Court is holding for the 400 million fraud from the Koprivnica-based food company "Podravka".

Dragic told the court that Markovic should have been remunerated in the amount of at least 1.5 million kuna for his work in the task force plus two million kuna upon the completion of the job.

"As far as I know, the contract with that law firm was concluded with the Privatisation Fund and I do not know how much money was eventually paid. I was a substitute and I do not know how contracts had been concluded," the witness told the court.

In response to Sanader's questions, Dragic said that he had not known whether Finance Minister Ivan Suker had participated in the final negotiations adding that he had later learnt about that from newspapers.

The trial is adjourned until next Thursday when Hypo executives Wolfgang Kulterer and Guenther Striedinger are expected to take the witness stand.

Sanader, who is detained in the Remetinec detention facilities, is to be released by Monday. A panel of judges at the Zagreb court is expected to consider appeals of the defence team and the prosecution regarding his release from the custody.