A drug supplier arrested for killing an addict in an alleged revenge attack told police: "I'm not capable of anything like that", a court heard yesterday.

Joseph Tingle denies plotting with friend Mark "Peao" Pearson to murder Richard Petty after he stole money from one of the street dealers who worked for them.

It is alleged the friends were furious 34-year-old Mr Petty had "taxed" Mark Fairweather when he went to his house the previous day and took £80 at knifepoint.

A murder trial jury has been told that Mr Petty went with others to steal - or "tax" - heroin from Mr Fairweather, but took money when he said he had no drugs.

The cash effectively belonged to Mr Tingle, 23, and his lodger, Pearson, 28, who supplied heroin around Billingham, near Stockton, to fund their habits.

Mr Tingle yesterday told the jury that the "taxing" had upset him, but added: "Not so much as to go around and do something like what's happened, like what I am here for today."

He said he expected there would be a confrontation at Mr Petty's home about the missing money, but insisted he did not know Pearson had a knife.

Mr Tingle told the jury that Pearson had talked about "stabbing him up" as they walked to Mr Petty's flat, but said he took no notice because it was "just beer talk".

He said he got as far as the door to the front room of the flat when he heard Pearson and Mr Petty arguing, but ran off when two other occupants fled as the attack was launched.

The occupants - tenant Carl Vincent and Mr Petty's cousin Craig - reached the ground floor and told a doorman to get an ambulance and call the police.

Pearson dumped the knife after he and Mr Tingle ran from the building, but he was arrested later that night, while his friend handed himself in the next day.

Mr Petty's body was recovered from the lounge of the seventh-floor flat in Melsonby Court. He had been stabbed eight times.

Pearson - who at the time of the killing lived with Mr Tingle and his partner and two children in Denby Road, Billingham - has admitted murdering Mr Petty on March 25.

Mr Tingle, who denies the charge, told police after his arrest: "If I had known what was going to happen, I wouldn't have been there."

The trial continues.