A Garda inspector said he now believed Bernard Conlon was set up to make a false statement.
Insp Gerard Connolly took the statement in July 1998 from Mr Conlon, who told him two men had come to his home in Sligo and threatened him with a silver bullet not to give evidence against the McBreartys in a licensing case.
Mr Conlon had given a detailed description of two men at the time.
Mr Conlon later told the Carty Garda internal inquiry team he had made up the story and that it was a false statement.
Mr Conlon has alleged Det Sgt John White of Co Donegal told him to make up the story and to identify members of the extended McBrearty family - Mark McConnell and Michael Peoples - as being the two men. He claimed this was done to set up the McBreartys of Raphoe.
Sgt White has denied all allegations against him.
Insp Connolly has told the tribunal that when Mr Conlon gave the original statement he had genuinely looked traumatised. Insp Connolly said he completely believed him at the time.
Insp Connolly said he had arranged with Sgt White to organise an informal identity parade in Letterkenny and in October 1998 Mr Conlon falsely identified Mr McConnell.
Mr Peoples was also identified in December 1998. Both men were arrested but neither was prosecuted.
Insp Connolly was yesterday asked by counsel for Mr Conlon, Desmond Dockery, if it was his belief now that Mr Conlon was set up to make the silver bullet statement.
Insp Connolly replied: "It is."
The witness was asked by his own counsel, Mark de Blacam, how he felt about his involvement in the silver bullet incident. How did he feel he had been treated?
Insp Connolly replied: "I feel aggrieved by it, Mr Chairman. I suppose I was the person in the middle of everything. If this tribunal finds that that incident didn't take place, I was certainly in the middle of everything and I'd say I was used on all sides."
Asked by whom and to what purpose, he said it depended on the findings of the tribunal.
Mr de Blacam asked if Insp Connolly felt he had been used by others.
He replied: "I do, yes."