"He could have checked these allegations. It is reasonable that before going out and accusing someone, you do this."
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Craig said checking MacGregor's story before taking the allegations to the board would have been "sensible and logical" and "the responsible and appropriate thing to do".
McKnight then challenged Craig, saying he had not checked any of the comments he "paraphrased" in his Mr X piece - so did he think it fair to expect Williams to check?
"The Mr X situation reflected opinions published by other people in other contexts," Craig said.
"This was very different. This was Mr Williams turning up... to say that these things were so and he didn't have grounds, he hadn't done any checking and I think he should have.
"And had he done that... then that probably would have stopped an awful lot of things happening downstream."
Craig's lawyers: telling his party about MacGregor was "a big no".
Craig gave further evidence about why he could not address the "false accusations" about him with his Conservative Party board when they demanded answers.
He said he had signed a confidentiality agreement with MacGregor and was unsure what he could tell his colleagues.
Craig would go on to breach that confidentiality 12 times, mainly in media interviews when he was asked about MacGregor's resignation.
But he would not breach it when the board asked him to explain.
"I said to the board I really do want to do what I can to be able to respond to your concerns. The allegations were nasty... I understood their concerns. All they knew from me was limited... that there had been a sexual harassment complaint and I didn't think it was valid and it had been withdrawn.
Craig said the allegations the board had been given were damaging and went further than what he had relayed to the board.
"I said I would try to give them answers... I said to the board I will find out whether or not I can respond... I went back to them after having a talk to my lawyers and said 'sorry guys, it's a big no'.
"I wasn't able to address the allegations that they had been put to them, that was the lawyers' advice. I realised it put me in an impossible position.
Craig said he believed one of the board was "leaking" information about him to the media, and his lawyers advised him strongly against discussing MacGregor.
McKnight asked Craig why he could not speak to his board, but could discuss the matters to some degree in media interviews.
He asked if the legal advice only pertained to Craig's conversations with the board.
Craig agreed.
The cross-examination of Colin Craig
The cross-examination of former Conservative Party leader Colin Craig continued today as his High Court defamation trial enters its third week.
This morning Craig was grilled further on the pamphlet he distributed to more than 1.6 million households last year in which he allegedly defamed Taxpayers' Union director Jordan Williams.
Williams' lawyer, Peter McKnight pressed Craig particularly hard on the comments of a Mr X in the publication, entitled Dirty Politics and Hidden Agendas.
Mr X was portrayed as a Conservative Party whistle blower and was quoted as saying Craig was "freakish under pressure" and there was a good chance he could make a political comeback.
Craig was later outed as Mr X - he was writing about himself.
The revelation gained Craig much criticism, and he explained his decision around the Mr X comments to the jury.
"When it was put to me that I was Mr X and I had used a nom de plume - I said I did," Craig told the jury.
"I was responding to the things that were said about me. Of course I wanted people to read the response."
Some of what Mr X said was the opinions of others "paraphrased" because Craig thought they were "interesting" and "relevant".
"I was responding to the allegations about me but I was also trying to raise the issue of dirty politics... It was about responding to false allegations made about me, serious false allegations.
Craig admitted the information was "not factual" but based on various "genuine" opinions.
"I put to it to you as dishonesty," McKnight said.
"I don't accept that. Certainly I used a nom de plume, certainly I paraphrased other people's comments, but all these opinions are genuine opinions."
Craig admitted he did not check with the people whose opinions he paraphrased before publishing them as Mr X.
McKnight asked if Craig had simply made some of the comments up.
"Remember, everything is ultimately my writing, but it's a reflection of conversations I've had," Craig replied.
"The text that is on the page has ultimately came from me but it was a reflection of other people's views or opinions that I believe were genuinely relevant."
McKnight is going through pamphlet, dissecting the claims Craig made about MacGregor one-by-one.
His cross-examination is expected to continue into tomorrow and possibly further into the week.
The defamation trial unfolded after Craig's press secretary, Rachel MacGregor, resigned suddenly just 48 hours before the 2014 general election.
The resignation was high profile and there was much speculation about why she left.
Weeks later MacGregor turned to Williams for support, and told him she had made a complaint to the Human Rights Commission that Craig had sexually harassed her.
She shared letters and poems the politician sent her. Williams then revealed the details to other Conservative Party members.
When Craig found out he publicly claimed Williams was part of a group of "culprits" determined to have him removed as party leader through a "campaign" of "false accusations".
Williams then filed defamation proceedings in the High Court, saying he did not lie about Craig.
After Craig finished reading his brief of evidence to the jury last week, McKnight, started the cross-examination.
The trial continues.
