A court has heard how a Wanganui man developed "an interest" in incest and paedophilia and shared live videos of his children online.
The 39-year-old man, who has name suppression, pleaded not guilty in the Whanganui District Court yesterday to four charges of committing an indecent act on a child.
The court was told the man allegedly showed one of his young daughters another man's genitalia via webcam and later performed sexual acts as another daughter sat with him on his bed.
In his opening address, Crown Prosecutor Lance Rowe said the case was about a man who "developed an interest" in paedophilia and incest and used an online chat service to meet others and discuss their "shared interests".
Mr Rowe said the man chatted with a couple in Sydney who involved their 9-year-old son in their acts, and that Australian police found records of their interactions on the couple's computer following investigations into a child pornography ring.
He said the Wanganui man also had online chats with a solo mother in the United States and that on one occasion he held his genitalia against one of his daughters on camera for the woman. He also masturbated while his daughter sat on his stomach when the woman requested it.
Defence counsel Mark Bullock urged the jury of seven men and five women to set aside any bias or prejudice.
"You will have those feelings in this trial as what arises involved children under 12," Mr Bullock said. "Do not let those feelings overwhelm you and do not let them enter your decision-making process."
Detective Craig Gorringe, the officer in charge of the investigation, produced a DVD of an interview with the man after search warrants were executed at his home and workplace.
In the interview the man admitted to the discussions and incidents with the Sydney couple but maintained it was "fantasy".
"I wasn't comprehending the reality of the people at the other end ... I got carried away.
"I was pretending to be someone I'm not," the man said.
Later Mr Gorringe read from a log of the chats with the Sydney couple where they asked for the man to get his 4-year-old daughter on camera naked, and that the man appeared to have done so. He also showed the couple two of the children, both under 10, taking a bath.
Mr Gorringe read from chat logs with the American woman where the man said he was "a bit scared to get the girls nude on cam".
Mr Gorringe will today continue to be questioned as the Crown's sole witness in the case. The trial is set for three days.