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Multiplex project director Ashley Muldoon has today defended the manner in which steel subcontractor Cleveland Bridge was replaced by Dutch firm Hollandia.

In the third day of the case between Multiplex and CBUK Muldoon said that CBUK had threatened Multiplex with the prospect of it going bust if Multiplex did not agree to financial demands.

He said: "They held a gun to our head and demanded more money or cost plus."

Cleveland Bridge QC Hugh Tomlinson put it to Muldoon that Multiplex had brought in Hollandia in a bid to bring its steel erection costs down from £90m to £75m.

Tomlinson added that Multiplex had been seeking a fixed price deal of £75m with Cleveland Bridge, which the firm had refused.

Muldoon said that he had to prepare for the possibility of Cleveland Bridge leaving the site. He said that tenders with both subcontractors had been running at once.

He said: "I couldn't have the site sitting there dead. I had a right to get a price and a programme from Hollandia while I waited for a price and a programme from CBUK."

"Going for Hollandia didn't secure the work for £75m either. They didn't offer me a fixed price."

The development follows Muldoon's suggestion yesterday afternoon that Multiplex had been "blackmailed" by Cleveland Bridge.

Muldoon was asked to explain the phrase 'plan b: CBUK fixed and f**k them later?', which was contained in an email sent to him by former Multiplex managing director for construction Matt Stagg. Muldoon said: "I thought it was a rather emotional response to us being in the position of being blackmailed."

Cleveland Bridge's counsel had argued that the strategy pursued by Multiplex had been to hit CBUK with a series of claims in the hope that the company would 'fall over'.

Muldoon disagreed, citing the "catastrophic effect on the programme" at Wembley that any CBUK pull-out was bound to have had.