By John Ruwitch
JINAN, China, Aug 23 (Reuters) - Fallen Chinese politician Bo Xilai called his wife insane after she testified at his landmark trial on Friday that he knew of money and a villa in the French Riviera that prosecutors say were given to the couple by a businessman friend.
The video and written testimony by Gu Kailai directly contradicted Bo's robust defence on Thursday, and appear to set him up to be found guilty in China's most dramatic trial since the Gang of Four were dethroned in 1976 at the end of the Cultural Revolution.
"He should know about it all," Gu said in a video recording shown in court and posted on the court's microblog, when asked whether Bo knew that she and their son, Bo Guagua, had received money from plastics-to-property entrepreneur Xu Ming.
Bo dismissed Gu's testimony as the ravings of a madwoman.
"Bogu Kailai has changed, she's insane, often tells lies," Bo said, according to transcripts on the court microblog, using Gu's official but rarely used name. "Under the circumstances of her mental illness, the investigators placed huge pressure on her to expose me.
"Her testimony as far as I am concerned, was (given) under psychological pressure, and driven by (hope of) a reduced sentence," he added.
Gu has been jailed for the murder of British businessman Neil Heywood in November 2011, the crime which eventually led to Bo's downfall.
The businessman Xu, who is also in custody, was once close to the Bo family, but also testified against him on Thursday, according to the transcripts. Foreign reporters were not allowed into the court.
Bo, the 64-year-old former Communist Party chief of Chongqing metropolis, has been charged with illegally taking almost 27 million yuan ($4.41 million), corruption and abuse of power. Of that amount, about 21.8 million yuan came from Xu and another businessman Tang Xiaolin, the court said, citing the indictment.
Bo was a rising star in China's leadership circles when his career was stopped short last year by the scandal involving Gu.
Supporters of Bo's Maoist-themed social programmes say he lost out in a power struggle with capitalist-leaning reformists in Beijing, exposing divisions within the ruling party as well as Chinese society.
Last week, two sources told Reuters that Gu would only testify against her husband if a deal had been reached with authorities to protect their son.
A deal in which Bo can be swiftly convicted and sent to jail, sparing him a death penalty and with no repercussions for his son, would be in the interest of China's leadership, which wants the trial to be concluded without causing open friction between Bo's followers and critics.
On Thursday, observers said the court proceedings were probably scripted and that Bo could receive a pre-arranged sentence in exchange for limited outbursts that would show that the trial was fair, appeasing his followers.
The trial will continue for a third day on Saturday, the court said, despite expectations it could last just a single day.
VILLA IN NICE
In written testimony, Gu said she had shown Bo the graphics and slideshows for the design of a villa in Nice, France that was paid for by Xu. Bo asked her about the slideshows and according to Gu, she told Bo about Xu's involvement.
"Therefore he knew that I asked Xu Ming to pay for this villa in France," Gu said in her written statement.
In the poorly shot video, Gu appeared soft-spoken and composed as she was questioned by a worker from the state prosecutor's office. She laughed when asked whether she had been coerced into giving evidence.
Gu did not link Bo with Heywood's murder, but said he was aware she considered the Briton a threat to their son. According to testimony at Gu's trial, she killed Heywood because he had threatened Guagua after a business dispute with Gu.
Gu said Bo was also aware of her fears about the safety of Guagua, who is now in the United States preparing for a law degree at Columbia University. Gu said she was afraid Guagua "would be kidnapped and killed in America".
"In 2011, Guagua's personal safety was threatened and Bo Xilai understood this," she said in her written testimony.
"We drew up a blacklist of suspicious people. One of them was Neil Heywood. I explained all of this to Bo Xilai."
Bo could face the death sentence, though a suspended death sentence is more likely, which effectively means life imprisonment, or a 20-year term. ($1 = 6.1211 Chinese yuan) (Additional reporting by Judy Hua in JINAN and Sui-Lee Wee, Ben Blanchard and Hui Li in BEIJING, Writing by Sui-Lee Wee; Editing by Raju Gopalakrishnan)