The case against a terrorist chief found liable for the Omagh bombing was filled with contradictions and based on the evidence of an FBI agent who is a liar and confidence trickster, an appeal court heard.

Evidence linking Michael McKevitt to the 1998 Real IRA car bomb attack in the Co Tyrone market town that claimed 29 lives was purely circumstantial, his lawyer argued.

Barrister Michael O'Higgins said testimony from US undercover operative David Rupert, which was crucial to the finding against his client, was totally unreliable.

Convicted Real IRA leader McKevitt and three other republicans, Seamus Daly, Liam Campbell and Colm Murphy, were ruled responsible for the atrocity in a landmark civil case taken by bereaved relatives in 2009.

Justice Declan Morgan, now Northern Ireland's Lord Chief Justice, ordered them to pay £1.6 million in compensation to the 12 relatives who took the historic action. No-one has ever been successfully convicted of the Omagh bombing in a criminal court.

As the four men began an appeal against the civil judgment in Belfast High Court, Mr O'Higgins said much of his case would focus on the trustworthiness of FBI agent Rupert. Reports from the American undercover operative, who claimed to have infiltrated the Real IRA, was key in the action against McKevitt.

While the agent did not give evidence in person at the civil hearing, testimony he had given about McKevitt at his 2003 criminal trial in Dublin for directing terrorism was submitted. Mr O'Higgins claimed Rupert was a mercenary motivated by money who had lied under oath.

"Mr Rupert is a pathological liar and a confidence trickster, and a man who it was very strongly submitted (at civil case), a submission based on forensic investigation, engaged in serial perjury in the course of giving his evidence in the Dublin trial," he said.

While the four dissidents are appealing against the judgment, the same court will hear a further legal submission from the relatives seeking to have the level of compensation increased.

Stanley McCombe, whose wife Ann died in the explosion, was the only representative of the Omagh families in court as many of the others were attending the funeral of 92-year-old Paddy McCrystal, whose daughter Geraldine Breslin was also killed in the bombing.