Mr Levi, 65, is suing Mr Bates, 77, for libel damages over three articles written by the chairman in the club's match-day programme in 2006 and 2007, and a letter sent to fans in 2007.

The articles variously accused Mr Levi of being a shyster, an "enemy within", attempting to blackmail the club and scaring off potential investors.

The dispute arose after Mr Bates took over the club in 2005 from the Yorkshire Consortium Trust, of which Mr Levi was a member.

Mr Bates, who denies libel and is fighting the case every inch of the way, says that Mr Levi blocked the sale of the remaining shares in the club in 2005 when he had no reason for doing so.

Mr Levi says he was never acting in a personal capacity – but rather for a company he was involved with called Cope Industrial Holdings - and there was a "genuine" legal dispute over whether or not a "call option" on the shares had lapsed.

Today Mr Levi's business partner, Jersey-based businessman Robert Weston, gave evidence at the High Court. He owns a 75 per cent stake in Cope, to Mr Levi's 25 per cent, and was involved in the Yorkshire Consortium's take-over of the club in 2004.

As a result of his association with Mr Levi, Mr Weston was also drawn into the row with Mr Bates, but he told top judge, Sir Charles Gray, that he would "resent and utterly refute" any suggestion that he or Mr Levi had ever tried to "blackmail" the club.

Mr Weston said that, in his experience of dealings with Mr Bates over the last four years, "this sort of prejudicial allegation is typical of the antagonistic, emotive and aggressive response I have seen from him when negotiations are not to his liking."

The 66-year-old, from St Helier, also said he felt "obliged" to mention an issue which he claimed was raised "deliberately, publicly and quite unnecessarily by Mr Bates in an attempt to influence my dealings with him".

Mr Weston said that, in 1978, he was "convicted of an offence" after he ended a relationship with a live-in partner and replaced her in his life with a younger woman who became his wife.

He said the conviction had "no bearing" on his commercial "honesty or integrity" and was the only time he had ever been in trouble with the law.

"Since it occurred it has never been taken into consideration by anyone in any area of my personal or business life," said Mr Weston.

But he told the court: "Mr Bates, however, has referred to the matter publicly on at least three occasions in the last three years, by publishing selective and imprecise details in his personal column in the club's football programme and in one or more letters to the club's members.

"I believe this was a blatant attempt to put undue and unethical pressure on me in the hope of persuading me to capitulate to his wishes."

Mr Weston said in his written statement that he is currently involved in a legal dispute with Mr Bates in Jersey, and told the judge that, as a result of that action, he had found that Mr Bates had a "general and consistent lack of transparency" in his business dealings.

Mr Bates, in relation to the Jersey dispute, "has shuffled companies and company names around with the result that material confusion has been generated", alleged Mr Weston.

Turning to the dispute about the "call option", Mr Weston said that Cope had invested £1,439,734 in Leeds United and was receiving interest payments on that sum quarterly.

However, he said, both he and Mr Levi became concerned by September 2005 that the loan was "in jeopardy" because "security" on it had not been perfected even though the club had an "obligation" to provide it.

It was at that stage that Mr Weston and Mr Levi entered into talks with Mr Bates, putting forward a number of compromise solutions. Mr Bates then alleged that the club was being "blackmailed".

At the end of September, a shares rights issue took place which diluted the importance of the "call option", and the club defaulted on interest payments to Cope, the court has heard.

"I am completely satisfied that the rights issue and subsequent events were a contrivance, devised by Ken Bates (and his in-house lawyer), to avoid paying the quarterly interest due on the loan notes up to maturity and to avoid the repayment of the value of those notes when repayment eventually fell due," alleged Mr Weston.

"Mr Bates will no doubt say that I and/or Mr Levi were deliberately trying somehow to prevent him from achieving his aim to wholly own and control the club and to run it profitably for the foreseeable future.

"Any such view was, and remains, a patent nonsense, as both Mr Levi and I would prefer, and would always have preferred, the Club to be successful under Mr Bates' control and, thus, for all parties involved to have received a reasonable return for their investment plus enjoying the satisfaction of having made a meaningful contribution towards saving an historic British football club.

"Any other attitude on our part would simply have been counter-productive to our own interests."

Mr Levi, who was banned from Leeds games in 2005 by Mr Bates, has previously said that by calling him a "shyster" Mr Bates was using anti-Semitic language, although he does not accuse him of being anti-Semetic.

The case, due to last two weeks, continues, with Mr Bates expected to take the stand on Tuesday or Wednesday.