A woman accused of plotting with her lover to kill his wife told a neighbour he had been upstairs with her "because he was trying on a Father Christmas outfit".

Sheila Bernarde said she went into Margaret Spooner’s home in November 1980 to see her, wearing no tights, walking down the stairs with Allen Morgan behind her.

She told Luton Crown Court: “I knocked on the door and walked in. Margaret was coming down the stairs followed by Allen. It must have been late morning.

“Allen was behind her. Margaret did not have any tights on. It was a bit cold. She said ‘We have been upstairs. Allen has been trying on the Father Christmas outfit for the play school'."

The couple, who are now married and living in Brighton, are accused of paying an unknown killer to murder Allen’s wife Carol, 36, at her shop Morgans Food Fare in Linslade, Leighton Buzzard on August 13, 1981. The murderer escaped with £435 cash and 1,400 cigarettes.

Allen Morgan, 73, and Margaret Morgen, 76, of Stanstead Crescent, Woodingdean, deny conspiracy to murder the mother-of-two.

Ms Bernarde, who was 33 at the time, said she lived two doors away from Margaret Spooner, as she was then known, in Camberton Road, Linslade.

Read more: Ex-husband 'shocked and disappointed' by wife's affair, murder conspiracy trial told

She said she got to know Carol and Allen Morgan as she bought cigarettes and newspapers from their shop. 

Allen was often at the house, she said, because he was helping to build an extension. In a statement made in August 1981 she said: “For some time I had my own suspicions about an affair between Allen Morgan and Margaret Spooner. This was confirmed in late July 1981 when Margaret told me herself.”

She said Margaret told her: “It started off as a causal thing but it became serious.”

When Margaret’s husband Mike Spooner found out about the affair, she said he went to see Allen and threw newspapers at him.

In the days before the killing she said Margaret and her children took her and her children on a boat trip along the Grand Union Canal to London. She said each night Allen would come to the boat. “Some nights they went off on their own. He did not stay the night,” she said.

On the morning after the killing, she said Allen Morgan knocked on her door and said: “She’s dead and I have been robbed - all for £500. She has been murdered. They smashed the side of her head in. I didn’t want it this way.”

She said she called Margaret who came round. “When she came in he said ‘It won’t be long now darling’. She said he told Margaret he had to tell the police everything about their affair.

The trial continues.