The founder of a flagship free school accused of defrauding the Department of Education of around £150,000 has said the suggestion he filled his pockets with public money to cover his debts was "unbelievable".
Sajid Hussain Raza, 43, denied fraudulently paying himself from grants given to help set up the Kings Science Academy in Bradford and told Leeds Crown Court he claimed the money for work he had completed.
Raza, the founder and principal of the school, said he initially agreed to work for a half salary when the school opened in 2011 because the project "meant so much", he was willing to make sacrifices with his pay.
The defendant, who is on trial with former school staff members Shabana Hussain and Daud Khan, is accused of diverting public money intended for the school, creating a series of false invoices and making false statements of mortgage applications.
The court has heard that Raza was experiencing financial difficulties at the time, missing mortgage payments, and had a number of county court judgements entered against him.
The prosecution told the jury that money from grants to the Kings Science Academy was credited to Raza's bank account and then used to make large mortgage repayments.
Ben Hargreaves, defending Raza, said to the former principal as he gave evidence: "The prosecution allege part of the reason you took advantage of the free-school process to steal money was because your finances were in such a bad state."
He continued: "The Crown's case is you were filling your pockets with public money to cover your debts on mortgages."
Raza replied: "It's just unbelievable."
The defendant told the court that setting up the free school was a "huge risk" with no guarantees it would be successful.
He said there was an agreement that he would be paid a certain amount of money for setting up the school and he drew down that money over a period of time.
He told the court he submitted invoices for the work but that these had been lost.
He said: "I was basically moving myself into an arena which was unpredictable. You don't know when you're going to get paid. If it was anything about financial security, that was the last place to go."
Raza said opening the school was a "one-time opportunity" and said he agreed to a reduction in salary when it opened in September 2011 during a time of austerity and cost-cutting.
He told the jury: "I said the school and the project means so much, I'm willing to take a half salary."
He added: "The project meant so much, I didn't want to lose the opportunity. If it came down to budgets and finances, I was happy to make those sacrifices."
When asked about claims he was "difficult, arrogant, obnoxious and hard to deal with", Raza said: "I was very confident."
He denied knowing Michael Gove, then education secretary, and agreed he was being "facetious" and acting "in jest" when he threatened to call Mr Gove after being challenged by Department of Education officials.
When Mr Hargreaves asked Raza about accusations that he had inflated his salary on mortgage application forms, the defendant said he had combined salaries he received from teaching, private tuition and rental incomes and that the claims on the forms were "roughly the truth".
The three defendants are accused of 10 counts between them.
Raza, from Bradford, is charged with four counts of fraud, three counts of false accounting and two counts of obtaining money transfer by deception.
Hussain, 40, from Bradford, a teacher at the school and Raza's sister, is charged with one count of fraud and one count of obtaining property by deception.
Khan, 44, from Thornbury, Bradford, the financial director at the school, is charged with two counts of fraud and three counts of false accounting.
All three deny the charges.
The trial continues.