Ian Huntley told a police officer: "You think I have done it", three days after Holly Wells and Jessica Chapman disappeared, the Old Bailey has heard.
Ian Huntley is accused of murdering Jessica Chapman and Holly Wells
He told Detective Constable Jonathan Taylor: "I was the last person to see them or to speak to them", and burst into tears, the jury was told.
He had earlier seemed "agitated" when police took a statement and searched his house, the court heard.
The caretaker denies killing the girls, who vanished from Soham in August 2002.
The two best friends went missing after a family barbecue at the Wells' home on 4 August. Their bodies were later found 13 days later in a ditch near RAF Lakenheath in Suffolk.
In court on Monday, Mr Taylor told how he and a colleague had taken a statement from Mr Huntley and searched his house on the Monday after the girls went missing.
But Mr Taylor had forgotten to get Mr Huntley to sign a consent form for the search at the time, and asked him two days later in the car park of Soham Village College, where Mr Huntley worked as a caretaker.
It was there that Mr Huntley burst into tears, the court heard.
Under cross examination, Stephen Coward QC, for Mr Huntley suggested "that did not happen".
The police officer replied that it did.
told him not to persecute himself, to pull himself together," he told the court.
When Mr Taylor told him that other people had seen the girls in that area, the caretaker "seemed to cheer up a bit".
Mr Taylor and his colleague Det Con Andrea Warren gave further details of the time they spent at Mr Huntley's house, which he shared with his girlfriend Maxine Carr.
Mr Taylor said he had seen wet patches on the walls of the dining room and
had been told there had been a flood.
Ms Warren said Mr Huntley had looked "pale and clammy" when they talked to him.
He had seemed "mostly relaxed" but "occasionally agitated" as they searched his house and took a statement, she told the court.
She said downstairs there was a strong smell of lemon cleaning fluid.
He told them he had been washing his dog outside his house when the girls approached and asked him how Ms Carr was, the court heard.
Mr Huntley told the detective that had been at about 1830 BST, and the girls had walked off towards College Road. He said he had watched TV for the rest of the day.
Mr Huntley had also seemed "a little offhand" when quizzed about the whereabouts of his then girlfriend Maxine Carr, who lived with him, the jury heard.
He said she had gone to see about a child minding job in Soham, the court heard.
"He didn't seem to know exactly where she was," Ms Warren said.
In the afternoon, the court heard from witness Stephen Fitchett, who said he was approached by Ian Huntley as the former returned from searching for the girls.
Mr Huntley said police had already searched his house which "made you look guilty", Mr Fitchett told the court.
"I said what would you feel guilty for if you've got nothing to hide," Mr Fitchett said.
The court heard statements from nine people who recalled seeing Mr Huntley
with his car outside his house on 5 August, between 1850 BST and 1950 BST.
One man remarked on how thoroughly Mr Huntley appeared to be cleaning his car, while others said they were annoyed the caretaker was doing this chore while
other people were out searching for the two missing girls.
Another witness, Special Constable Russell Goldsmith, told the court he was patrolling the area near St Andrew's Primary School on 5 August, when Ian Huntley came over to report a man on the school field carrying a bin bag.
The court also heard how Mr Huntley, while talking to Mr Goldsmith, drew attention to "three, inch-long vertical scratches" on his own jaw line which he said he had acquired "play fighting" with his dog.
'Pale and shaky'
Later witness Marion Clift, who lived next door to Ms Carr's mother, Shirley Capp, in Grimsby, told the court how she saw the couple outside the house on Tuesday 6 August.
Maxine had arrived at her mother's four days earlier, on the Saturday, Mrs Clift told the court.
On Tuesday she said she saw Ms Carr with Mr Huntley looking into the boot of "a small red car".
Maxine was crying and Mr Huntley looked "pale and shaky", Mrs Clift told the court.
Mr Huntley denies murdering the 10-year-old friends but has admitted conspiring to pervert the course of justice.
Ms Carr denies helping an offender and conspiracy to pervert the course of justice.
The case continues.