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The relationship between Multiplex and Cleveland Bridge on Wembley grew so bad it culminated in a blazing row between the rival owners of the firms, the High Court heard this week.

Revealing the extent of animosity between the main contractor and the steelwork specialist, Roddy Grant, former Cleveland Bridge chief executive, told the court of a "terrific screaming match" between Multiplex chairman John Roberts and Cleveland Bridge's major shareholder Sheikh Abdullah al-Rusheid in February last year.

Grant also revealed that Multiplex construction director Matt Stagg had accused him of attempting to blackmail the Australian firm over payment.

Under cross-examination from Roger Stewart, counsel for Multiplex, Grant said Sheikh Abdullah and John Roberts had had the row during a telephone conversation in February 2004. The dispute occurred as the companies were attempting to finalise the Heads of Agreement to provide a way forward. Grant went on to describe the sheikh as "a difficult chairman" to work for.

The court later heard that Matt Stagg had accused Grant of attempting to blackmail Multiplex in January 2004, after Grant implied that CBUK would face insolvency if it did not strike a revised deal with Multiplex. Stagg told Grant: "This is blackmail. The last person that did that to me [M&E contractor Matthew Hall] never worked in Australia again."

Under intense questioning, Grant admitted he had considered putting Multiplex under pressure by falsely claiming the sheikh had instructed CBUK not to lift the stadium's arch until payment disputes were resolved. However, Grant stressed that he had never actually made the claim to Multiplex.

Grant said: "These were potentially things I'd say if necessary in meetings … in order to get attention. It wasn't the sheikh's position. But I didn't say it."

During a long spell on the stand, due to conclude on Thursday, Grant acknowledged that Alan Milburn, the Labour MP for Darlington, had offered to approach the Football Association to ask them to investigate delays on the project. However, Grant maintained that the offer was made in the context of Milburn being CBUK's local MP, and that he was not brought in as part of a wider strategy to raise the dispute to a political level.

Grant maintained that the £32.7m valuation agreed between the two parties for work carried out up until 15 February 2004 was final and binding, and not, as Multiplex alleges, provided to maintain cash flow and subject to clawback.

However, Grant acknowledged that it was "unlikely" CBUK would have survived without signing the supplemental agreement on Wembley. He said: "We would have been very tight on cash, and it is likely that in that extreme position the sheikh would have been unable or unwilling to fund the company - and that would have been that."

The case continues.