A man accused of kidnapping and blackmailing two North-East businessmen has denied masterminding the plan because his own company was facing financial ruin.

German-born millionaire Volker Kappler, 37, was owed more than £500,000 by a Bishop Auckland firm whose owner Paul Thompson was thought to be planning to move to Australia.

Mr Thompson's hose manufacturing company VPS sold material to Hartlepool firms Asgard UK, owned by John Wood, and Formel E, owned by David Langthorne.

Prosecutors say Mr Wood, 36, and Mr Langthorne, 40, were snatched from Mr Wood's factory, blindfolded, beaten and threatened with death as they were taken on a three-hour terror drive.

It is alleged a gang hired by Kappler drove the men to his factory in Mold, North Wales, where he met them and where they were told their relatives would be raped and murdered unless they paid £600,000.

Teesside Crown Court has heard claims they were dumped in a field on Merseyside following their alleged ordeal and were so frightened when they finally returned to the North-East they sent a fax to a bank in Dubai ordering the money transfer.

A jury was told that the transaction did not go through because they had mistaken ZZ for 22 on the account into which they were supposed to pay it.

Kappler, who denies two counts of kidnap and two of blackmail, was in the witness box for a second day today and refuted suggestions from prosecutor Peter Johnson that he masterminded the kidnap to make sure his company, Superflexibles, which supplied VPS, got its money.

Mr Johnson said: "You thought you were not going to get paid. You thought Thompson was going to emigrate and you thought I am going to make sure I get paid."

Kappler, of Conwy, North Wales, replied: "That's not correct. No."

Kappler's wife Dawn also gave evidence and backed up his claims he was at home on watching The Simpsons the night the two Hartlepool men say they were taken to his factory and threatened.

Kappler admitted he searched Companies House just a week before the alleged kidnap on March 14 this year, but he had done so to find out who was involved with Asgard UK and Formel E - not to discover the home addresses of Mr Wood and Mr Langthorne.