Mr Joseph Murphy jnr turned down an invitation from Mr Michael Bailey to bear 50 per cent of the cost of a £100,000 payment to Mr James Gogarty, he told the Flood tribunal.
The purpose of the payment was, he said, to extricate his friend, Mr Ray Burke TD, from the effects of "a dispute between two old men".
He was responding to Ms Patricia Dillon SC, for the tribunal, who was asking him about an alleged three-way meeting between Mr Bailey, Mr Bertie Ahern and Mr Burke.
Mr Murphy conceded that he "may have been wrong" in thinking, from Mr Bailey's account of his conversations with the two Fianna Fail politicians, that a three-way meeting had taken place.
"I do not think that Bertie Ahern would have attended such a meeting," he said.
It emerged that Mr Bailey had been speaking to Mr Ahern on the telephone, the tribunal heard.
He had relayed to Mr Dermot Ahern, at their meeting in London on June 24th, 1996, that there had been a three-way meeting in Mr Burke's house between Mr Bailey, Mr Ahern and Mr Burke.
Ms Dillon put it to Mr Murphy: "Following that, Mr Bailey contacted you and asked you to pay £50,000?"
The JMSE chairman replied: "Mr Bailey rang JMSE and left a number and asked if I would speak with him urgently."
Mr Murphy returned his call and Mr Bailey said to him: "This thing with Jim Gogarty is getting out of hand. He said he had been speaking to Bertie Ahern and Ray Burke on the matter."
Mr Bailey suggested that a £100,000 payment would fix things.
"I said `no way' and asked him why he should pay £50,000."
Mr Bailey agreed with him and said: "By the time I left Ray Burke's house yesterday, he was in no doubt that he was caught up in a dispute between two old men."
Mr Bailey had confirmed to Mr Murphy that he was a friend of Mr Burke, but insisted that he had never made any payments to the former Minister for Foreign Affairs "except for political donations at the time of an election".
Ms Dillon put to him: "Mr Dermot Ahern's recollection, in giving evidence to the tribunal, "was that you told him that Michael Bailey had previously paid Ray Burke for planning permission."
"Not correct," Mr Murphy replied.
"I told him Mr Bailey was giving money during election time. I did not associate this with planning." Mr Bailey said he had "never at any time" paid for planning, Mr Murphy said.
Ms Dillon was curious as to why Mr Murphy had not taken the opportunity to ask Mr Bailey about the alleged payment to Mr Burke by JMSE at this time, gi ven that this had been the subject of two meetings between him and Mr Dermot Ahern.
"You wanted to update Mr Dermot Ahern. Could you not have asked Mr Bailey the central question, namely what happened in his house in June 1989?"
Had he not considered it reasonable to inquire in view of Mr Dermot Ahern's visit to London the previous week?
Mr Bailey had been in a rush, replied Mr Murphy. They had talked only of the business in hand - the suggestion that Mr Gogarty should be paid £100,000 shared equally between them.