David Diggins used a report that contained "wildly optimistic,'' "misleading'' and "simplistic'' information, a court heard yesterday.

Stuart Croucher, an assistant consultation manager for London Underground, made these assertions during Diggins' Supreme Court trial, now in its second week.

Diggins, 49, of Somerset, was a senior manager responsible for all foreign and international loans at the Bank of Butterfield.

However, the Crown alleges that he falsified the information contained in a memo and its supporting documents.

Based on that information a loan for 1,875,000 was advanced to a Gibraltar-based company called Neway Properties Ltd. who then used the money to buy a property in London called the Moulin Complex.

Mr. Croucher, who made a statement to Bermuda Police on April 15, 1996, said that London Transport wanted to build an underground in the west of London since 1989.

Consequently, the area where the Moulin Complex was situated had to be safeguarded from future development.

Mr. Croucher said there were four different routes being considered but his organisation was in the midst of consulting the public (in London) and other bodies before the best one was selected.

That meant that Neway Properties' plans to repair the building at the Moulin Complex and add further development to the site could not take place because it would have conflicted with London Underground's plans.

All planned development, Mr. Croucher explained, had to go before the Local Authority which immediately place these proposals before the London Underground for comment.

Mr. Croucher said that the construction was expected to begin in the year 2000 and last at least four years.

However, each member of the consultative team was told to be purposefully vague on such issues as the exact start date for the subway construction or which part of western London would be targeted.

Mr. Croucher then disputed those parts of Diggins' report which stated that the safeguard notice would be removed around September or October 1995. He said that no one could say such a thing with any certainty because the negotiations had not concluded by then.

Moreover, Mr. Croucher labelled this conclusion as "wildly optimistic'' "misleading,'' and "simplistic.'' Earlier, Crown witness solicitor Ian Hunter testified that Diggins' accommodation report which was based on a property evaluation that the Shaw Corporation conducted, was "broadly correct.'' Furthermore, he said that as far as he knew it was accurate to say that London Transport would drop its plans for a subway line near the Moulin Complex.

However, like Mr. Croucher, he said it was "overly optimistic'' to suggest that they would have dropped their plans by September or October 1995 because those discussions were still ongoing.

Additionally, Mr. Hunter said that he was alarmed to learn in the background paragraph of Diggins' accommodation report that the true price for the Moulin Complex was 1,623,000 instead of 1,875,000.

Meanwhile, Diggins had initially been charged with stealing $2,812,500 and obtaining the money under false pretences and with intent to defraud, inducing Mary Faries to deliver the money to Neway Property Ltd. without proper authorisation on August 29 1995.

But those charges were dropped last Wednesday morning when Solicitor General Barrie Meade issued a Nolle Prosequi which meant that he was no longer prepared to proceed on either the stealing or the obtaining money by false pretences charges as they first appeared on the indictment.

Diggins now stands accused of fraudulent false accounting. It is alleged that on August 25, 1995 he falsified a report and its supporting documents.