Polancec said that negotiations on the amending of the shareholders' agreement had been initiated at the request of MOL, which began increasing its stake in one of the biggest Croatian companies in 2008.

Eventually MOL had become the owner of a bigger stake than the Croatian government, so relations between the owners had to be rearranged, Polancec said, adding that before the negotiations began about a dozen meetings with MOL executives had been held annually.

"The purpose of entering into negotiations was to protect national interests in INA," the witness said.

Polancec said that Sanader had authorised him to lead the negotiations and choose his associates, and that he had had to report to Sanader, the inner Cabinet and the Presidency of the ruling Croatian Democratic Union (HDZ) party. "They were taking key decisions anyway," he said.

The national anti-corruption office USKOK claims that Sanader received 10 million euros in bribes from MOL to secure it a dominant position in INA.

On arriving at the courthouse, Sanader declined to answer questions from the press as to his expectations of the testimony of one of his closest former associates.

USKOK had dropped the investigation of Polancec shortly before issuing the indictment, saying it had found no evidence to prove that Polancec had helped Sanader in the commission of the crime or that Polancec had misled other Cabinet ministers during the amendment of the shareholders' agreement.

Polancec told media at the time that he had been deceived and manipulated if it turned out to be true that Sanader had received bribes. Polancec said that during the negotiations with MOL he had not had the authority to make decisions and that all key decisions had been made by the HDZ Presidency and the inner Cabinet.