He was speaking at the Truth and Reconciliation Commission's hearing in Johannesburg into the role of the media during apartheid.
Du Preez likened Neethling to Nazi geneticist Dr Josef Mengele because he experimented with poison to be used by the security branch to kill anti-apartheid activists.
Du Preez said it would be hard for mainstream newspapers to regain their credibility after failing to report on apartheid-era atrocities.
Vrye Weekblad was closed down in February 1994 after Neethling on appeal won a defamation case against the newspaper.
Neethling sued Vrye Weekblad for R1 million after it published former Vlakplaas commander Dirk Coetzee's statement that Neethling had provided him and others with poison to drug or kill African National Congress activists.
Vlakplaas was a security police base outside Pretoria.
In the Rand Supreme Court Judge Johan Kriegler accepted Coetzee's version and found Neethling an unreliable witness, and dismissed the case. "But the idea that a respected citizen and member of the 'Akademie vir Wetenskap en Kuns' could be a killer and a liar was simply too much for the judges of the Appeal Court.
"Vrye Weekblad was ordered to pay Neethling's costs and R90000 for the defamation," Du Preez said.
The case dragged on for five years and legal costs for both sides came to to more than R2 million. "The decision by the Appeal Court was one of the blackest moments in our judicial history."
Du Preez said there was absolute proof from several sources that Neethling lied to the court. The then Pretoria Attorney-General had a sworn affidavit by Vlakplaas policeman Steve Bosch in which he told how he fetched poisoned bottles of beer from Neethling.
He also had other affidavits gathered during investigation into Wouter Basson and the chemical and biological warfare project whiched proved Neethling had perjured himself.
"Vrye Weekblad was closed because of Lothar Neethling's perjury."
In one of the affadavits, which Du Preez gave to the TRC, former state prosecutor Johan van den Heever said Neethling told him about various poisons during a tour of his forensics laboratory.
During the visit, Neethling spoke of some of his achievements: "It was in this context that he mentioned to me that the laboratory had developed a poison which would precipitate a heart attack.
"He furthermore mentioned that the poison would not be traced at a post mortem examination," the affidavit said.
Neethling had testified under oath before Kriegler that nothing like this ever happened in his laboratory, Du Preez said.
"He should be charged with multiple murder, perjury and fraud - fraud for getting our money for his lies and closing down a newspaper that could have played a very constructive role in the transformation of our society today."
Vrye Weekblad was founded in November 1988 by a group of frustrated Afrikaans journalists, but was forced to close down in Februrary 1994 after losing the defamation case.
Du Preez said it was a risky occupation and Vrye Weekblad's troubles began with their first edition.
The then minister of Justice, Kobie Coetzee, told Du Preez he saw the publication as a potential threat to the state. Knowing the group of journalists did not have much funding, he increased the registration fee from R10 to R40000.
This was part of the reason Vrye Weekblad was taken to court after releasing its first few editions without registration.
Du Preez said the government developed a strategy of harassing alternative newspapers and bleeding them dry through the judicial system.
On November 17, 1989, the Vrye Weekblad published Coetzee's confessions about notorious death squad's actvities. While the story made front page news around the world, Du Preez said South African newspapers gave preference to police general Herman Stadler's denials of Vlaakplaas' existence.
He said police spy and former Star crime reporter Craig Kotze, who testified on Tuesday, led the discrediting campaign against Coetzee after his confessions about death squad activities were published.
The SA Broadcasting Corporation also led the discrediting campaign against Coetzee. "Yet as far back as 1987, the SABC knew about Vlakplaas when they interviewed some askari's with balaclavas on at Vlakplaas. One of the interviewees was Glory Sedibe, a senior askari."
An askari is an ANC freedom fighter turned police informant.