A Sun reporter with a "copper contact" was prone to exaggeration and once claimed to be related to Barack Obama, according to the paper's former deputy news editor.
Ben O'Driscoll told a court he took the young female reporter's claims "with a pinch of salt" and did not think she had a police officer contact.
"She was a lovely young girl, one of the younger reporters, but she was prone to exaggeration," he said.
"She had to be treated with extreme caution.
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"I remember on one day she told me she was a BMX champion, was related to President Obama, and single-handedly built a life-sized Spitfire in her back garden.
"We had to take with a pinch of salt a lot of whatever she told you."
O'Driscoll said he never approved a cash payment request for the journalist because he did not trust her.
He said he did not believe the reporter's claims of having a "Chelsea cop" contact, and there is no email evidence of him approving a payment to her source.
"I can't remember a situation where I allowed her to have a cash payment," he said.
"I didn't trust her."
The reporter, who cannot be named for legal reasons, emailed O'Driscoll on June 16 2008 about the involvement of Tetra Pak heir Hans Rausing in a suspected drug fuelled hit-and run.
She told him: "This is a copper contact of mine," and forwarded the email from the Chelsea officer with details of the incident.
But O'Driscoll said: "It was another vague expression from a reporter, it could have meant anything."
He said he did not read the full email chain, where the reporter offers to pay her police contact for his information.
"I was aware of it being a tip from a police officer, and I was unaware it was a source she was cultivating.
"A police officer can pass on information to the press, there's no problem with that – it happens all the time.
"If it's being done for money, there must be an overriding public interest.
"That's always been my view and the view of others at the paper.
"I didn't know she was paying this police officer."
Asked by his counsel, Martin Hicks QC, whether the information is confidential, O'Driscoll told the court: "There's no confidentiality in this story.
"Mr Rausing is driving round central London full of crack cocaine, and when they go to his house, he goes on the run.
"It's just not confidential information."
He added that his efforts that day had been largely taken up by a story about The Sun catching a Nazi war criminal at Euro 2008.
He said he had been taken into Rebekah Brooks' office that day to personally brief Rupert Murdoch on the story.
"It was the only time I met him," he told the court.
"I was running that story, Rebekah had taken me into her office to brief Rupert on it, and it was a story I had to make sure everything was spot on.
"That day, most of my energy would have been on this story."
O'Driscoll is accused of knowing Pyatt was paying Broadmoor healthcare assistant Robert Neave, after forwarding a memo to the reporter in which Neave was referred to as "tipster Bob".
O'Driscoll said he had "absolutely not" heard of the name "tipster Bob" before being sent the email, and had no contact with him.
He added: "I would say at this stage Mr Neave is nothing more than a whistleblower.
"He has been working there for 28 years and for whatever reason he's now decided he wants to blow the whistle on some of the treatment of the patients."
O'Driscoll argued a story leaked by Neave about killer Robert Napper being put on suicide watch was in the public interest, coming just a few months after serial killer Daniel Gonzalez had managed to kill himself inside Broadmoor.
"We were well aware on the issues in Broadmoor, and here we have a man charged with a notorious murderer held at Broadmoor," he said.
"It can't be confidential that this guy is locked down.
"We put it in the public domain, it was in the public interest that this guy was not going to escape justice the way Daniel Gonzalez did."
The court was shown an email from the reporter to O'Driscoll on 7 September 2010 asking for a cash payment for a story about Arsenal star Jack Wilshere being arrested.
"Do you remember my Chelsea cop gave the first tip on Wilshere?" she wrote.
"Well he's back on board after having to do a mandatory attachment with the flying squad and I want to give him a bit of cash when i meet him this week.
"I have to pay cash only to keep him off the system.
"But he's an ace contact and WILL bring in stories/stand stuff up/down. How much could I give him in cash, do you think?"
Jurors heard £500 was paid out to the officer for "Wilshere arrested", but O'Driscoll said he had nothing to do with it.
He also baulked at her claims that her contact had helped The Sun land the story.
"It's not true in the slightest," he said.
"I don't remember that email but if I had seen that first line I would have dismissed it completely.
"We didn't get the first tip."
He said the story was in the public interest to publish, and none of the information was confidential or not already in the public domain.
"There is nothing confidential – this is an England star brawling in central London," he said.
"This guy was breaking into the England team and it's an article about his behaviour away from football.
"He is a role model for kids, or should be."
He argued another story alleged to have come from the police contact was publically known in the public interest.
It related to singer Mika's sister plunging 50ft from a window on to spikes below.
He said: "Mika was a big star at the time, and it's a big story.
"It was something our readers knew about, and it was very newsworthy, horrible as it is."
He said the scene was swamped with emergency services, and neighbours were able to tell journalists the details of the incident, which happened at a party.
The trial continues tomorrow.
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