A drug dealer confessed to his friend that he had shot dead his supplier and told him: "The teddy bear has had his last picnic," a Court heard.

Neil Thompson said Nicholas Hickson had admitted shooting Philip Smith at a lay-by in Tong Lane, Tong, during two telephone calls to him, Leeds Crown Court heard yesterday.

The jury was told Hickson had called Mr Thompson at 10pm on February 19, 2002, after blasting Mr Smith in the neck with a shotgun and then "finishing him off" with a second shot to the head.

Hickson, 32, of Royds Avenue, Birkenshaw, is accused of murdering Mr Smith over a debt.

The shooting occurred three years to the day since Hickson was brutally "knee-capped" by Mr Smith over the debt.

Mr Thompson told the court that during the telephone call Hickson had said: "Who's knee-capping now?" and asked him for an alibi for the evening.

"He said there had been a bit of an accident in what had gone on with Philip Smith. He hinted that Philip Smith was, in fact, dead," Mr Thompson told the jury.

He admitted he did not take Hickson seriously but when he rang again the following morning, he noticed a change in mood. Mr Thompson told the court that Hickson said the gun had gone off accidentally and that he had taken a change of clothing or got rid off the clothes he was wearing.

The court heard how Mr Thompson and Hickson had been friends for years and went fox shooting together.

They had access to a double barrelled shotgun which was kept on a Leeds farm, and in court Mr Thompson said the weapon was possibly that used to kill Mr Smith. About ten days before the shooting, Mr Thompson told the courts he had provided Hickson with some shotgun cartridges after he asked for some ammunition that would "knock a fox over."

During cross examination, defence barrister Alistair MacDonald QC denied Hickson had made the comment about the "teddy bear's picnic" and claimed Mr Thompson had been heavily involved in the drug dealing leading up to the shooting.

Earlier, the court heard Teresa Waterson, who had been Mr Smith's partner for four years and now uses his surname, describe her husband-to-be as a "brilliant dad".

She said she was aware of his drug dealing and admitted he would bring washing-up powder boxes full of £20 notes to the family home in Pudsey.

She also admitted Mr Smith had once driven his car into the owner of the forecourt in Birkenshaw from where he ran a used car lot over an unpaid debt of £50,000.

Hickson denies murdering Mr Smith and claims the gun inadvertently went off when he lunged for it.

The trial continues.