Elton 'agreement' disputed

John Reid was Sir Elton's business manager for 26 years

Sir Elton John's former manager and lover has spent a second day giving evidence in the High Court about financial arrangements between the superstar and himself.

John Reid, 51, told the court that he had not agreed to pay Sir Elton's touring costs in return for a 20% gross cut of "everything".

He admitted that Sir Elton's advisors had been unhappy with the 20% gross arrangement but said the singer had "chosen to reject" their advice.

Sir Elton, 53, is suing Andrew Haydon, the former managing director of John Reid Enterprises (JREL), and City accountancy firm PricewaterhouseCoopers (PwC).

During the hearing the court has been told that from 1980 to 1998 Mr Reid's company, John Reid Enterprises, was paid £73.5m.

'Taking advantage'

Mr Reid is not a party to the action before Mr Justice Ferris, but the case centres on what was agreed in 1984 between Sir Elton and him over who would pay overseas touring costs.

Sir Elton's case is that he had finally agreed Mr Reid would get 20% gross of "everything", instead of the previous arrangement of 20% net.

This was in exchange for looking after everything in his business life, including overseas touring costs.

Sir Elton is suing over tour expenses

Mr Reid, who has been called to give evidence by PwC, said he would never have agreed to pay touring costs and claimed it was never raised during the 1984 meeting.

But he agreed with Gordon Pollock QC, counsel for Sir Elton, that the singer's advisors were not happy with the 20% gross arrangement and thought he was taking advantage of the star.

"He knew what their advice was and he chose to reject it," said Mr Reid.

Mr Pollock: "You knew they thought it was far, far too much."

Mr Reid: "I do not believe that his advisors understood the nature of our relationship and the nature of the business that we were in."

Income 'virtually doubled'

The court heard that between 1980 and 1984 Mr Reid's gross income had been between £500,000 and £1m a year, but that it had "virtually doubled" in 1985 under the new arrangement.

Sir Elton alleges that Mr Haydon was negligent in allowing JREL to charge him overseas tour expenses, including booking agents, accountants and producers.

The singer's case is that the "several millions" which he paid out in touring expenses should have been borne by JREL under a management agreement.

PricewaterhouseCoopers (formerly Price Waterhouse) is accused by Sir Elton of negligence in managing his affairs.

Both defendants are contesting the allegations against them.

Sir Elton has already accepted $5m (£3.4m) from Mr Reid in settlement of his claims against him.