An eight-year-old boy was raped twice and sexually abused by a boy four years his senior, a court heard on Monday.
Liverpool Crown Court was also told the 12-year-old forced the boy to have sex with an eight-year-old girl.
The accused, from Wigan, denies two rape charges and seven offences of indecent assault.
He also denies three charges of inciting the boy to have sex with the girl, eight. The offences allegedly took place between April and July 2005.
Victim interviewed
The court heard the victim's parents thought he had suffered bullying because his behaviour had changed, but they discovered the real reason during a family holiday.
They cut short their holiday and told the police who interviewed the victim.
The eight-year-old spoke of being raped twice, suffering sexual abuse - once while handcuffed - and being made to have sex with the eight-year-old girl, the court heard.
The case continues.