A businessman from an upmarket village near Wolverhampton expected to be handed a package of cigarettes when almost £80,000 worth of cocaine was tossed into his car by someone who then drove off, a court was told.

Edward Phipps, from Claverley, told Warwick Crown Court he then spent the next two days making phonecalls about the mistake before a man collected the cocaine from him. He said he did not take the package to police because he was worried about repercussions.

The 58-year-old, a former director of the now dissolved Maxwell James Recruitment Services in Walsall, was caught in a covert operation by West Midlands and Thames Valley Police and has admitted conspiracy to supply cocaine.

In 2007, officers in the Newtown area of Birmingham watched as Phipps handed two blocks of cocaine to a man who was then stopped by police.

Warwick Crown Court heard Phipps, of Gatacre, accepted the package he handed over was cocaine, but claimed he expected it to contain cigarettes.

But after hearing the case opened in December last year, Judge David McEvoy QC described the basis of plea put forward by Phipps as “laughable”. He adjourned the case for a trial of issue which started yesterday.

Asked by prosecutor Mr Graeme Simpson why he had not taken the cocaine to the police, Phipps replied: “Oh yes, then the druggie wants his money back and shoots me and my family.”

The case against Phipps plus two Coventry men and one from Hereford continues today.