Peter Kilfoyle obtained the confession in 2004
A convicted drug smuggler told an MP he gave £400,000 to then-Home Secretary Michael Howard's cousin as a bribe to gain release from jail, a court heard.
John Haase was jailed for 18 years in 1995 but later released in exchange for information about guns he had planted, Southwark Crown Court has been told.
Peter Kilfoyle, Labour MP for Liverpool Walton, told jurors Haase admitted the plot when he visited him in jail.
Haase, 59, and his nephew Paul Bennett, 44, deny conspiracy to pervert justice.
Haase was sentenced in open court to 18 years in prison but was released less than a year later after Michael Howard signed a Royal Prerogative of Mercy.
The drug smuggler had provided "leads" about guns which had in fact been planted at the request of him and Mr Bennett, the court has heard.
The weapons were seized and Mr Howard, home secretary in the Conservative government at the time, ordered the men's release less than a year after their conviction.
On Thursday, Mr Kilfoyle told the court he visited Haase in Whitemoor Prison in Cambridgeshire in 2004, when the defendant made a sworn affidavit.
In the affidavit, which was read out in court, Haase admitted getting accomplices to plant guns across Merseyside and the North West of England.
He then passed information about the guns to his customs handler Paul Cook, suggesting the guns belonged to other criminals.
Haase added in the affidavit: "It was a con all the way."
The then Home Secretary Michael Howard was allegedly tricked
The court heard Haase said his nephew Mr Bennett had told him he knew a relation of Mr Howard, Simon Bakerman.
He said they later supplied £400,000 in a holdall, which was later delivered to Mr Bakerman.
In the affidavit, Haase said when he was freed from prison in 1996, he returned to Liverpool, met Mr Bakerman in a pub, and thanked him for his help, rewarding him with ten kilos of "brown" (heroin).
Under cross examination by Trevor Burke QC, for Haase, Mr Kilfoyle denied he had ever offered the defendant any inducement to sign the affidavit.
Haase's wife Deborah, 37, of Teyham Avenue, Knowsley, Merseyside, and Sharon Knowles, 36, of Wadeson Road, Merseyside, also deny conspiracy to pervert the course of justice.
The trial continues.