Two former friends have told conflicting stories to the William Tyrrell inquest about whether a driver was seen pushing something down into a car footwell the day the three-year-old went missing.
William vanished while playing at his foster grandmother's home in Kendall on the NSW mid north coast on September 12, 2014.
Kendall man Tim Palmer told the boy's coronial inquest on Wednesday he'd had a conversation with friend Michael McInally in 2018 in which Mr McInally said he needed to get something off his chest.
He said on the day William Tyrrell went missing he saw a white sedan driving "crazily" down Batar Creek Road and the driver using his left hand to push something into the passenger side footwell, Mr Palmer said.
"He said if I was to tell anyone this story, he would deny it," Mr Palmer told the NSW Coroners Court.
Mr McInally then addressed the inquest and disputed several elements of Mr Palmer's story.
He said in fact, he'd been driving down Combyne Street when he saw a person holding their left hand up as if to get better phone reception.
Asked by the coroner why he would tell a story in 2018 about how he saw someone in 2014 trying to get phone reception, Mr McInally said: "I don't know."
"I was in a drunken state," he said.
"I don't remember half of the conversation."
But Mr Palmer's version was wrong, he said.
Mr McInally said he remembered the car as he'd never seen it in the area before.
Mr Palmer said he believed his decision to tell police about the 2018 conversation led to the long-time friends falling out.
The inquest resumes on Thursday, in closed court.