Labour leader Andrew Little has apologised to Earl and Lani Hagaman at a trial for defamation but maintains he was right to be suspicious about a donation to National and the award of a contract to the donor's hotel firm a month later.

Little took the witness stand at the defamation trial in the Wellington High Court today and said he would take personal responsibility for any harm he had caused in public comments.

Hoteliers Lani and Earl Hagaman are suing Little over comments he made about a $100,000 donation from Earl Hagaman to the National Party in 2014 and a contract awarded to their Scenic Hotel firm a month later to manage a hotel in Niue.

Little has already apologised publicly and in court he again personally apologised to Lani Hagaman sitting in the public gallery for "any hurt" his words had caused.

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However, he maintained he was right to be suspicious at the time saying Foreign Minister Murray McCully's involvement in particular "raised my suspicions".

"My motivation was against a Government and the minister responsible for this [Foreign Minister Murray McCully]. It was a Government which had a poor track record in managing conflicts of interest."

He pointed to the use of public funds for an "agrihub" on a Saudi businessman's farm, its initial response to the Panama Papers tax-haven issue and negotiations on the SkyCity convention centre.

Little said he did not know Earl Hagaman but had known of him and was aware of his "right wing" views.

Earl Hagaman, with his wife, Lani, are suing Labour leader Andrew Little for defamation. Photo / File
Earl Hagaman, with his wife, Lani, are suing Labour leader Andrew Little for defamation. Photo / File

Little said he had wanted to settle the case prior to the trial - but concluded the Hagamans had no interest in settling after what he described as the "most bizarre negotiation" he had ever been involved in.

The Hagamans had rejected two offers of $26,000 and $100,000 and said the wording of the apology was inadequate, but Little said they had never provided him with the wording they wanted.

However, in cross-examination the Hagamans' lawyer, Richard Fowler, presented a letter from last December in which the wording the Hagamans wanted for an apology was included.

Little conceded that, but said there was no further attempt to amend it to something acceptable to both. "This was the opening gambit and I would expect negotiations to continue."

He said the Hagamans claimed costs of $215,000 which included legal fees he considered "excessive" as well as public relations costs he did not believe he should pay.

His top offer of $100,000 was the most he could afford and he would have to borrow that using his family house as security.

Although there were public funds available to him, he believed he should take personal responsibility for it. The Hagamans are suing for a total sum of $2.3 million plus costs.

Fowler also asked Little why he had not checked with the Hagamans before commenting on the matter, and Little said he could not have accepted the reassurances of an "interested party" and preferred to leave it to the Auditor General.

Fowler also asked if Little found it difficult to apologise, pointing to a dispute between Little and tax specialist John Shewan.

Little had retracted a comment he made about Shewan which was based on an incorrect newspaper report in the Bahamas.

That retraction was made on a Saturday night just before an All Blacks game and did not include an apology. Little said Shewan had not wanted an apology at first and although he later asked for one, he was happy with the final statement that was made.

The trial continues tomorrow when the closing arguments are expected before the jury deliberates.