**FILE ** A Dec. 10, 2003 supplied file photograph of Daniel Morcombe. Business leaders have joined with police to offer a record $1 million reward to find missing Queensland boy Daniel Morcombe. Daniel was 13 when he vanished from Palmwoods, on the Sunshine Coast hinterland north of Brisbane, on the afternoon of December 7, 2003. (AAP Image/Qld Police Media, files) NO ARCHIVING, EDITORIAL USE ONLY
**FILE ** A Dec. 10, 2003 supplied file photograph of Daniel Morcombe. Business leaders have joined with police to offer a record $1 million reward to find missing Queensland boy Daniel Morcombe. Daniel was 13 when he vanished from Palmwoods, on the Sunshine Coast hinterland north of Brisbane, on the afternoon of December 7, 2003. (AAP Image/Qld Police Media, files) NO ARCHIVING, EDITORIAL USE ONLY

A highly sophisticated and elaborate undercover operation with WA police posing as a criminal gang led a Perth man to confess to killing schoolboy Daniel Morcombe, a Brisbane court was told yesterday.

The court was told the ruse swung into action after Brett Peter Cowan, 44, was called to testify at an inquest into Daniel's disappearance in Brisbane in early 2011.

Mr Cowan has pleaded not guilty in the Supreme Court to murdering the 13-year-old Sunshine Coast boy in December 2003.

Prosecutor Michael Byrne described how an undercover police officer befriended Mr Cowan after the inquest on his flight back to Perth, where Mr Cowan was living.

He later introduced him to "friends" who were supposedly part of an "organised, wide-ranging and very powerful criminal gang".

Mr Cowan was told he must follow the gang's mantra of loyalty, respect and honesty and over several months was gradually allowed to get involved in supposed criminal conduct, Mr Byrne said.

Mr Cowan was led to believe he had to show his trustworthiness to the gang in light of a pending "big job".

"The storyline went, if he gained the complete trust of the gang and the big boss in particular, he could become a full member of the gang," Mr Byrne said.

Daniel Morcombe's parents are expected to give evidence at the trial of Brett Peter Cowan. Photo: AAP.

In an attempt to prove his loyalty, Mr Cowan allegedly made his confession in a bugged Perth hotel room to a man he knew as Arnold, another undercover officer.

Mr Byrne said Arnold told Mr Cowan he expected honesty and loyalty and could sort out any problems over Daniel's disappearance but if it couldn't be fixed, he would "drop him like a hot potato".

The court was told Mr Cowan told Arnold he was driving to Nambour when he saw Daniel at a bus stop and offered the boy a lift, which he accepted.

Daniel was allegedly driven for 30 minutes to a secluded house near Beerwah.

The prosecutor, quoting a secretly recorded conversation, said Mr Cowan admitted he had planned to molest Daniel.

"I never got to molest him and he panicked and I panicked and I grabbed him by the throat and before I could, he was dead," Mr Cowan was quoted saying.

"I was starting to pull his pants down and he said 'Oh, no' and started to struggle."

The court was told Arnold told Mr Cowan he would need to see the site to ensure no incriminating evidence was left behind.

Mr Cowan boarded a flight to Brisbane the next day, where he met another supposed gang member and took him to the location.

Police made a painstaking search of the site and several bones belonging to Daniel were found, Mr Byrne said.

But defence lawyer Angus Edwards said Mr Cowan's confession was false and he only made it because he believed he could make $100,000 from the "big job" the gang was planning.

He said the confession led police to a site that was 60m from where Daniel's body was found at Coochin Creek, near Beerwah, in the Sunshine Coast hinterland.

Mr Edwards said Mr Cowan confessed to throwing Daniel's shoes in a creek but the footwear was found in bush about 10cm under vegetation and sand.

"They weren't found in the creek, they were found in bush," Mr Edwards said.

Mr Byrne said it was the crown's case that Mr Cowan acted alone and another man, Douglas Jackway, was not involved.

But Mr Edwards disputed that, telling jurors Mr Jackway was released from jail a month before Daniel disappeared after serving eight years for abducting a different boy from the roadside.

Mr Jackway had arranged to stay with his sister on December 7, the day Daniel vanished, but did not turn up, Mr Edwards said.

He said the route Mr Jackway would usually take was on the road from which Daniel disappeared.

"He lied about his whereabouts, changed his story about where he was," Mr Edwards said.


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