Walt Disney chief executive Michael Eisner yesterday told a Delaware courtroom how he had appeared on television praising his former second-in-command Michael Ovitz even as he was plotting his departure from the company.

In his fourth day on the witness stand Mr Eisner was questioned about an interview he did with veteran CNN anchor Larry King in September 1996, during which he denied there were any tensions in the boardroom. Instead he said he would have hired Mr Ovitz again if he had the chance.

In reality, he was telling other Disney directors that he wanted Mr Ovitz to leave. At the time he had some hopes that Sony might hire Mr Ovitz, removing Disney's obligation to pay a severance fee. Forced to watch a clip of the interview in the courtroom, Mr Eisner admitted he had been less than truthful but said he felt it had been in the company's best interest to cover up the friction in the boardroom.

He admitted that going on the show at all was probably the wrong thing to do. "It was certainly a dumb thing to do," he said.

"It was unfortunate and stupid and I wish we hadn't done it," he added.

Mr Eisner was testifying in a case brought by shareholders angered at the $140m severance package Mr Ovitz received after spending just 14 months in the job.

Lawyers for investors are arguing that Mr Ovitz should not have been hired in the first place and that there were ample grounds to dismiss him without compensation. The board, they contend, failed in its fiduciary duties.

On Wednesday Mr Eisner told the court that he was "about as mad as I have ever been" when he discovered that Mr Ovitz had hired a public relations agent in his final days at the company, to brief the media on his pay-off.

Mr Eisner said he had discussed Mr Ovitz possibly heading to Sony at a meeting on September 30 1996, during the 25th anniversary of Walt Disney World.