A 15-year-old boy wearing a balaclava was seen holding a gun on the night a waiter was shot dead in Orkney, a court was told yesterday.

William Grant, 51, told the High Court in Glasgow that the person he saw was Michael Ross, now 29, who is standing trial for the murder of Shamsuddin Mahmood, 26, at an Indian restaurant in Kirkwall, Orkney, in June 1994.

Mr Grant, a father of four, said that he was in a public lavatory in Kirkwall between 6.30pm and 6.50pm on June 2 when he saw Ross coming out of a cubicle with a gun in his hand.

He told the court: “The cubicle door opened. I just turned my head around to my left. I saw a person coming out. He had a handgun in his hand. It looked quite shiny and clean. I was terrified. It gave me quite a shock. I just thought it was somebody playing about.”

When asked if either he or the gunman had said anything, Mr Grant, who said that he had been drinking at several pubs that evening, replied: “I said nothing. The person said, 'oh s***', or something like that.”

He added: “The person went back into the cubicle and locked the door. I walked out. About 15 yards from the toilets I stopped and turned back towards the Kiln Corner. The person came out of the toilets, walking up towards the lane.”

Asked if he recognised the gunman, Mr Grant said: “Yes. I had an idea it was Michael Ross. It was such a quick glance, but what I saw I'm more or less definite.”

He said that he knew Mr Ross by sight from seeing him with his father, Eddie Ross, a local policeman. Asked by Brian McConnachie QC, for the prosecution, if he could identify the man, he pointed to the accused in the dock.

Mr Grant was also shown a silver revolver and a black self-loading pistol but said that he could not be sure if either was similar to the gun he saw. “It was such a quick glimpse,” he said. “It would be a guess.”

He told the court that he did not go to the police at the time because he was “scared”, but he admitted that he was the writer of an anonymous letter that claimed to identify Mr Mahmood's killer and that it was handed to police in Kirkwall in 2006, 12 years after the murder.

He had taken the decision to write the letter, he said, because he could not “live with it any longer”.

Mr Ross, 29, of Inverness, is accused of entering the Mumutaz Indian Tandoori restaurant in Kirkwall on June 2, 1994, with his face masked and shooting Mr Mahmood in the head.

Mr Ross, who was only 15 at the time of the alleged murder, is also accused of attempting to defeat the ends of justice by changing his clothing and disposing of the weapon. He is further charged with, while acting with others whose identities are unknown, committing a breach of the peace outside the Indian restaurant by shouting, swearing, uttering threats of violence and racist abuse.

The offence was allegedly committed between May 3 and May 24, 1994. Mr Ross denies all charges and has lodged a special defence of alibi, claiming that he was nowhere near the Indian restaurant or Kirkwall town centre, but was cycling in another part of Orkney.

Mr Grant told the court that he had seen three boys - including the accused - shouting and swearing outside the Mumataz Restaurant two or three weeks before the killing. He said that Mr Ross was the one doing the shouting.

He said that he was shouting “some kind of racist remarks. Words to the effect of, ‘I am going to kill that Paki bastard'.”

Under cross-examination, Mr Grant admitted that there was a possibility that the person he saw in the public lavatories that night was not Mr Ross. He also admitted that he had lied to police about aspects of his statement and had made up lies about Mr Ross's father. The trial, before Lord Hardie, continues.