A stolen Leonardo Da Vinci painting was handed over to a private investigator in a pub car park, a court has heard.

The Madonna of the Yarnwinder began its journey back to Scotland in 2007, four years after it was stolen from Drumlanrig Castle in Dumfriesshire.

Robert Graham, 57, of Lancashire, told Edinburgh High Court that he met an underworld figure in a Liverpool car park and paid £350,000 for the canvas.

Mr Graham is one of five men who deny trying to extort £4.25m for the canvas.

The private eye was giving evidence as the trial moved into its sixth week.

He insisted that everything he did was “legal and lawful” and denied that anyone had ever threatened the safety of the painting.

If you could get a Da Vinci back, you could get anything back Robert Graham

He described how his partner in Crown Private Investigations, John Doyle, had been the first to hear about the possibility of being involved in the return of the artwork.

The pair went to solicitor Marshall Ronald for advice and learned there was supposed to be a reward or finder’s fee of £1m.

“We thought we could live with that,” Mr Graham told the court.

Mr Ronald met a man he believed was acting for the Duke – but was really part of a police sting operation – and came back to say £2m was on offer.

“I thought it was fantastic. It was twice as much as my highest hope,” Mr Graham said.

He told defence solicitor John Keenan: “We thought that if we were very lucky and everything went well we would end up with £50,000 each which was fantastic wages.”

Mr Graham said he had hoped to go to Drumlanrig Castle to personally hand over the Madonna painting to its owner, the Duke of Buccleuch, in a blaze of publicity.

Both he and Mr Doyle had insisted on publicity as part of the deal, as it could have revived the fortunes of “Stolen Stuff Re-united”, a loss-making website they ran together.

“We just thought it would be the best advert,” Mr Graham told the court.

“You couldn’t buy an advert like that. If you could get a Da Vinci back, you could get anything back.”

The arrangement led to him travelling to the pub car park in Hale with £350,000 in the boot of his Jaguar to hand to an underworld figure who was in touch with the people who had the painting.

Some hours later the man known to the trial only as Karl returned with the painting, covered by a white sheet, in a sponge-lined container.

‘On her way’

After a phone call to Mr Ronald to say “The Lady is on her way home” Mr Graham and Mr Doyle drove north, but rain and traffic problems forced them to pull into the Lockerbie Manor Hotel.

The following morning they took photos of the painting with throwaway cameras bought from the local Tesco.

The painting was later delivered the the Glasgow offices of law firm HBJ Gateley Wareing where it was seized during a police raid.

On trial alongside Mr Graham are Marshall Ronald, 53, and John Doyle, 61, also from Lancashire, and Calum Jones, 45 from Renfrewshire and David Boyce, 63, from Lanarkshire.

They are not accused of the robbery.

The trial continues.