A businessman who drove Sinn Fein leader Gerry Adams during his peace process visits told a court today how a blackmail bid by two former IRA prisoners left him terrified for the lives of himself and his family.

The 52-year-old said threatening letters and follow-up phone calls accused him and his business partner of using the IRA's name to raise £6 million.

They also demanded £150,000 "contributions" from each of them to resolve matters.

The men - neither of whom can be named for legal reasons - were warned the paramilitary organisation had conducted a "prolonged and intensive investigation" into their activities, London's Southwark Crown Court heard.

His letter, signed "P O'Neill", the IRA's "nom de guerre", added if they did not do as they were told "appropriate action would be taken".

The Limerick-born company chief said: "I was very frightened when I read this, particularly because of what had happened to (my business partner), what he had received.

"He was quite scared, quite worried about who was behind this and what they were intending."

The businessman - who agreed he not only loaned company cars out to Sinn Fein officials visiting Britain during the Good Friday Agreement negotiations but personally drove Mr Adams around London - insisted there was no truth in the allegations levelled against him and his partner, a former Sinn Fein supporter.

"I was very scared. I had no idea what these individuals were on about except the supposition that somebody was trying to extort money from me because of my business and some grievance somebody had with me.

"We had absolutely no idea how serious these people were. We had to assume they were entirely serious and that our lives and the lives of our families were in danger."

In the dock are Nick Mullen, of Birlington Mews, West Acton, west London, Ronald McCartney, 55, of Ross Road, Belfast, and co-defendant Louis O'Hara, 43, of Collard Avenue, Loughton, Essex.

They all deny two counts of conspiracy to blackmail last year.

The court has heard Mullen was convicted of conspiracy to cause explosions and sentenced to 30 years' imprisonment in June 1990.

His Old Bailey trial heard he was "quartermaster for an IRA active service unit in London" two years earlier. But his conviction was later quashed on appeal.

Mark Heywood, prosecuting, said McCartney was jailed at Winchester Crown Court in 1976 for attempting to murder three policemen, conspiracy to cause explosions, and firearms charges, all "related ... to his activities as a part of his membership of the IRA".

The jury has been told they and O'Hara were allegedly involved in threats "pregnant with menace" to force the businessmen to pay up.

The businessman said the first contact, from a mobile phone last March allegedly "attributed" to O'Hara, simply told him "Silly boy, silly boy".

"I assumed it was a call telling me ... that I had done something wrong. I supposed it was some sort of threat, like 'we have got you'. It certainly wasn't a friendly phone call."

The following day he received the letter.

He told Mr Heywood he had known nothing about an investigation and branded the assertion he had used the IRA's name to raise £6 million as "bizarre".

"Have you ever raised any money for the movement?" the barrister asked.

"No," he replied. "I would not have any truck with any such carry on."

He explained: "I have no Republican background. I suppose I have, for want of a better word, an anti-Republican background because of the manner of Republicanism, its agenda to use violence.

"I never provided financial support. I never have and never would."

The businessman, who phoned the police after receiving the letter, said the only relevance he believed the figure of £6 million had was as some sort of "guesstimate" about the value of his business.

"I think it was just a sham, a cloak over the real perpetrators behind this."

He told the court that police, who advised him to move out of his home and stay away from his office, later began monitoring calls to his home.

The first was from a phone allegedly linked to Mullen, who described himself as a "middleman".

The businessman told him: "The arrangement I want to come to is for people to go away and to let me get on with my life, I mean I haven't done any harm to anybody.

"I don't know why these people are targeting me with this, what appears to be some kind of extortion or other."

The next call, from someone with a Northern Ireland accent, accused him of "extorting a lot of money" using the IRA's name.

Following a series of exchanges, the caller told him: "You have looked after them, (your business partner's) looked after them as well."

After asking if he was talking about Mr Adams, the businessman explained: "I drove for a short period for ... Adams over here, in a normal capacity as part of the peace process. That's the only contact I've had. I do not know that man personally."

The caller then suggested he contact Pat McGee, the Brighton bomber, who he referred to as "a party", before continuing: "Pat will be talked to tonight as well like, you know what I mean, we're telling you what to do, right? OK?"

During a third call, also allegedly linked to Mullen, the businessman was heard to say: "I'm worried about myself and my family ... these allegations being made about me are basically a lie."

The trial was adjourned until tomorrow.