A British Army interpreter told police he was the victim of a conspiracy by the CIA which made up an espionage plot against him, the Old Bailey heard yesterday.

Corporal Daniel James, who is accused of breaching the Official Secrets Act while serving in Afghanistan, said the deliberate attempt to undermine him was the result of a growing division between the Americans and the British over how to run the campaign in the country.

Corporal James, from Brighton, was the personal interpreter to General Sir David Richards when he was commander of Nato’s International Security Assistance Force (Isaf) in 2006. The Iranian-born Territorial Army corporal is accused of spying for Iran.

When arrested on suspicion of spying he told the police he had been “set up” by the CIA in a plot to undermine General Richards because the Americans were angry that the British commander wanted to find a peaceful solution to the war with the Taleban rather than adopt the US approach of attacking the insurgents.

Mark Dennis, QC, prosecuting, however, told Corporal James the allegation was “rubbish”, and he went on to highlight a whole range of different explanations the TA soldier had “come up with” for why he had sent e-mails and made numerous phone calls to Colonel Mohammad Heydari, a military assistant at the Iranian embassy in Kabul.

Mr Dennis said his latest defence case - that he had been communicating with Colonel Heydari to try to negotiate a deal to buy gas for Nato and Afghanistan from Iran at a cheap price - had only been put forward on Friday last week. Mr Dennis asked Corporal James whether he had informed his defence counsel about the “gas scheme”. The defendant claimed he had made it clear for a long time.

When he was interviewed by police on December 18 and 19 2006 after he was arrested at RAF Brize Norton in Oxfordshire, Corporal James denied any knowledge of Colonel Heydari, claimed he knew nothing of e-mails sent to the Iranain embassy, and said he had no idea why two Nato-confidential documents were stored in his USB computer device.

Mr Dennis outlined to the court how Corporal James’s story had changed several times since his arrest. At one point he had claimed he was communicating with the Iranian embassy as part of a personal campaign to promote peace and trade between Iran and the United States.

Mr Dennis wondered why his defence counsel had made no mention of any gas scheme in drawing up his case until last Friday, and asked Corporal James whether he had deliberately requested that his barrister make no mention of it. Corporal James replied: “I never said anything.”

In earlier evidence, however, the TA corporal who used to give salsa dance classes to his military colleagues in Kabul, said he was “paranoid” about other people discovering his idea for buying cheap gas from Iran. He admitted he had hoped to make “a million” out of it by charging two or three per cent commission from the company he was involving in his project.

When Mr Dennis cast doubt on his earlier claim that he was “an unwitting pawn in a CIA plot” against him, Corporal James replied: “Anything’s possible with the CIA.”

The trial continues.

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