Kosor was referring to the 2 million kuna and 300,000 euros which party treasurer Mladen Barisic deposited in the party's safe after she took over from Ivo Sanader, who is charged with the other accused in this case of siphoning about 70 million kuna from state institutions and companies via the privately-owned marketing agency Fimi Media into the HDZ's slush fund.

Kosor stressed that Barisic had said, when handing over the money, that it had come from donations, adding that she had no reason to suspect its origin. She said she had begun to suspect its origin following media reports on the Fimi Media case, after which she notified Chief State Prosecutor Mladen Bajic, and HDZ secretary-general Branko Bacic handed over the money to the Chief State Prosecutor's Office (DORH).

"With the benefit of hindsight, I would have proposed that the money be given back to the donors or immediately paid into the state budget," Kosor said, adding that at that time she had served as prime minister and had been less involved with the party's affairs.

Answering questions from the prosecution, Kosor said that at the time when Sanader was prime minister the HDZ Presidency did not adopt a financial plan and an annual financial statement as was its obligation under the statute and that it never decided on investing in the media or on hiring singers in election campaigns.

"The party's presidency never decided on which singers would be hired and how much they would be paid. I thought that sympathisers or members were performing for free," Kosor said.

She said that Sanader decided on agendas of meetings and proposed conclusions of the presidency, adding that all decisions were made unanimously. She also said that she had no knowledge of how Sanader acquired a luxury BMW vehicle, which the prosecution claims was a gift from Robert Jezic, owner of the petrochemical company Dioki.

Responding to questions from the defence and the trial chamber, Kosor said that the HDZ had no reason to fill its slush fund with money illegally obtained from state institutions and companies because it was receiving enough from the state budget, membership fees and legal donations. She said that from 2003 to 2009, when according to the indictment the HDZ's slush fund was filled via the Fimi Media agency, the party received about 230 million kuna from the state budget alone.

Kosor denied claims that, when resigning as prime minister, Sanader told her that elections could not be won with legal money as a third should be raised "under the table".

"I can't remember details, but I have said that we didn't discuss that. Sanader told me that there was a treasurer and that he was dealing with finances. As for under-the-table financing, I don't remember that and I don't think it was like that. Knowing myself, I would have asked him what it meant," she said.

Kosor said that while she ran the HDZ the party's presidency did not discuss the 2 million kuna and 300,000 euros which the treasurer Barisic had deposited in the party's safe before leaving his post, and that she agreed with secretary-general Branko Bacic to hand over the money to the DORH.

"That money was not spent and I thought that the presidency need not discuss it," Kosor said.

The next hearing was set for July 9.

In addition to Sanader, Barisic and the HDZ as a legal entity, the accused in the case are former government spokesman Ratko Macek, former HDZ chief accountant Branka Pavosevic, and Fimi Media owner Nevenka Jurak.