A convicted drug trafficker offered to give police information about Graham Kinniburgh's alleged killer in the belief he would be up for a $1 million reward, a jury has heard.
The witness, who has a history of dishonesty offences, told a Supreme Court jury on Thursday Stephen Asling confessed his involvement in the murder when the pair were inmates at Loddon Prison in 2006.
He said the man he knew as "Aso" in the jail yard was upset by a book he was waving around, naming him as the shooter.
"He pointed to it and he goes, 'I did this but they have no proof because I'm the best sneako'," he said.
But Asling's defence pointed out the book in question wasn't published until 2007 - one year after Asling's alleged jail yard confession.
"He had a book in his hand, referring to himself," the witness replied.
"He was waving it around and showing it in jail."
Prosecutors allege Carl Williams arranged the 2003 contract killing of Kinniburgh for $150,000 and hired Stephen Asling, 56, who is on trial for murder, and the now-dead Terrence Blewitt to do the job.
The witness agreed he made a statement to police about Asling and the book as he faced life imprisonment for large-scale cocaine trafficking, for which he had no defence.
But he denied making it up to win the reduced sentence by co-operating with authorities.
The witness told jurors he kept in contact with Asling after they left jail and he spoke often about the killing.
"It's just, you know, how he got away with it and, you know, he was always worried about, you know, people that knew things about it. He was always, like, nervous and that. He didn't trust anybody."
He told authorities Asling confessed to him that on the night Kinniburgh was killed, he went to the movies with his girlfriend, then left through the back door.
"He went and done the job - which was the shooting of Graham Kinniburgh - then came back the same night," he said.
The jury heard the witness made a second statement after his release on parole and asked police about a possible reward, thinking it was $1 million but later learnt it was $100,000.
In the statement he added new details, alleging Asling told him about how he and Blewitt ambushed Kinniburgh and they were caught in a crossfire.
The witness also told jurors he had never made a false statement but later admitted he had done so regarding $US50,000 of undeclared cash he alleged was legitimately obtained.
The trial continues.