A business partner of developer Paddy McKillen has told the High Court in London that Mr McKillen had not informed Anglo Irish Bank that he had been negotiating a £5m project management fee as part of a refinancing deal for Coroin.

Coroin is the company which controls three top hotels in London.

Mr McKillen is suing the billionaire Barclay brothers over their takeover of the Connaught, Berkely and Claridges Hotels.

In evidence today Liam Cunningham, who runs Mr McKillen's office in Hume Street in Dublin, described negotiations at the beginning of last year when Mr McKillen was attempting to negotiate fresh finance for Coroin with the Qatari royal family.

Mr Cunningham said he had sought the consent of Anglo Irish Bank as the security holder for Paddy McKillen to reduce his shareholding in the company from 36% to 18%.

But he admitted under cross-examination that he had not informed Anglo Irish Bank that Mr. McKillen was also negotiating a five-year £5m management fee for the supervision of the refurbishment of the hotels.

Mr Cuningham denied an assertion by counsel representing the Barclay borthers' interests that the management fee arose because Paddy McKillen was giving up some of his shares.

Mr Cunningham said that the fee was so that Mr McKillen would have "remained involved, maintained the equity of the hotels and delivered the development project."

Mr Cunningham said he had notified Anglo Irish Bank on February 15 2011 that Mr. McKillen was about to reduce his shareholding as part of the Qatari deal. He said: "I knew that if Paddy was selling any shares, I'd have to get Anglo's approval."

Paddy McKillen owes Anglo Irish Bank, now the IRBC, €240m which is secured on the three London hotels and the Jervis shopping centre in Dublin.

Later in his evidence, Mr Cunningham noted that at that time "because Anglo were under the control of NAMA, what normally would have taken two or three days, would have taken a month. My sole purpose, he said, was in starting the process of getting a credit application to have the shares released, because the whole process was going to take so long."

Mr Cunningham said that the following day Paddy McKillen had a meeting with solicitors Arthur Cox in Dublin. Mr Cunningham said that at that time "the key attraction was to get the development of the hotels started and underway, not the five-year management fee".

Mr Cunningham denied that the management fee was in return for Mr McKillen's giving up an 18% shareholding in Coroin.

The 2011 Qatari deal later collapsed, but last week the judge hearing the case, Mr. Justice David Richards, revealed that Paddy McKillen had recently negotiated a 50-50 joint venture with Qatari investors who include Sheik Hameed, the prime minister of Qatar. There is also a potential management fee in it for Mr McKillen for the future development of two of the hotels, the Berkely and the Connaught.

Earlier, a former director of Coroin told the court that the company, when controlled by NAMA, was not in a position to carry out major refurbishment projects without refinancing.

Mark Hennebury, who described himself as a shareholder representative at Coroin, left the company when NAMA sold €800m of debt in the hotels to the Barclay brothers.

Belfast-born property developer Paddy McKillen, who owns 36% of Coroin, is suing the brothers in a dispute over the control of the hotels. Mark Hennebury said he had been continuing to assist Mr McKillen in raising finance to buy shares in Coroin.

In evidence, Mr Hennebury described how the Manchester-based Green family, who were major shareholders in the company, had sold their share to the Barclay brothers and that Irish financier Derek Quinlan, who had 31% of the shares, had also aligned himself with the Barclays. "Everybody was exiting Coroin," Mr Hennebury said.

Mr Hennebury said there was no formal agreement or understanding between him and Paddy McKillen for Mr Hennebury's help in raising finance for Mr McKillen to buy additional shares in Coroin.

Referring in evidence to a failed attempt to refinance Coroin with help from NAMA, Mr Hennebury said "I thought at the that time, NAMA would give us some consideration. I thought it was a project worth exploring". Mr Hennebury said his discussions had been "more positive than negative", and that that view has been passed on to Paddy McKillen.

Mark Hennebury was subsquently dismissed by the company on September 9 2011.

The case continues.