A woman who said she saw Tommy Sheridan taking part in a sex threesome has denied concocting the claims for money.
Tommy Sheridan sacked his legal team and is representing himself
Under cross-examination by the MSP, who has begun representing himself after sacking his legal team, Anne Colvin, 54, said she had been paid £1,000.
The News of the World promised a further £6,000 when the allegations were published.
Mr Sheridan said the stories were untrue and has brought a £200,000 defamation action against the tabloid.
On day 10 of the case, the Glasgow Socialist MSP said to Mrs Colvin: "The truth is your story is so ridiculous that no-one would believe it until November (2004) when a 'get Tommy Sheridan' bandwagon started to roll from the News of the World offices and you went to jump on it and make some money for yourself."
Mrs Colvin said the claim was "absolutely ridiculous".
When asked to recall what she had seen when she opened the bedroom door in the hotel suite, Mrs Colvin said: "I saw you.
"I saw you naked on a bed with another naked man and a woman engaged in sexual activity.
"Youse were so busy that no-one had noticed my head going into that room."
Mr Sheridan replied: "Engaged in sexual activity?"
The witness said: "You know you were."
Mrs Colvin told the court she felt in danger and was anxious to leave the room and what she described as a "sleazy situation".
Mr Sheridan later asked the witness if she had ever been involved in such activity.
She said: "Absolutely not and I hope you're not about to come out with that one."
Closing his cross-examination, Mr Sheridan suggested she had contacted the paper as part of a money making scheme devised along with her friends.
Mrs Colvin said: "Rubbish."
The MSP then suggested she had tried to get £10,000 from the tabloid but had to settle for £7,000.
Again, Mrs Colvin said: "Rubbish."
Ms Trolle described Cupids in Manchester as a "dump"
A Scottish Socialist Party activist then told the court she had group sex with Mr Sheridan and his brother-in-law and visited a swingers' club with them.
Danish-born Katrine Trolle, 31, an occupational therapist, told how her first encounter with Mr Sheridan was during a by-election in Anniesland, Glasgow in 2000, when she was a student in Aberdeen.
She told the court a couple of weeks later he invited her to his home.
She said: "He offered me a glass of wine. We talked a wee bit about politics and then we went upstairs to the bedroom."
Mike Jones QC, counsel for the News of the World, asked what happened.
Ms Trolle said: "We had sex."
The next meeting with Mr Sheridan followed an invitation to the home of his brother-in-law Andrew McFarlane.
"We had sex," she told the court. "All three of us."
"Together?" asked Mr Jones.
"Yes," she replied.
Ms Trolle also told how she was invited to Cupids, a swingers club in Manchester.
She said: "I decided to go because curiosity got the better of me.
"I suppose I was just trying to prove myself, that I was this liberated free-thinking Scandinavian and no-one was going to prove me otherwise so I decided to go."
Also on the trip were Mr Sheridan, his brother-in-law, sex-columnist Anvar Khan and a man she only knew as "Garry".
"It was a dump," she said.
"We went to one of the small ante-rooms, side rooms and had sex.
"Tommy offered me some kind of wonder drug that would give loads of energy. But I said no thanks."
She also told the court she denied everything when the News of the World confronted her about the affair in 2004.
In his cross-examination, Mr Sheridan claimed that the accusations were part of a political plot against him.
He said SSP treasurer Allison Kane had encouraged Ms Trolle to tell her story and said she and others were "politically involved" to undermine his position within the SSP.
But Ms Trolle replied: "If they wanted to undermine you they could have done it without having to go through court and cause a lot of grief and harm to a lot of people."