Lafras Luitingh, a former special forces soldier who joined the SA Defence Force's CCB in 1988, was giving evidence at the trial of former CCB agent Ferdi Barnard, who has been accused of killing Webster and 33 other charges. Barnard has pleaded not guilty.
Luitingh said he failed to inform the Harms Commission that Barnard had confessed to killing Webster.
Luitingh said he was introduced to Barnard by CCB managing director Joe Verster in September 1988 and became his handler shortly afterwards.
Barnard supplied him with information about diamond, money and gold smuggling operations. He also gave information on the African National Congress and prominent leftwing politicians.
Luitingh said Barnard was appointed on a temporary basis and was fired after six months on the instructions of Verster, who told Luitingh that Barnard had committed a security breach.
In February 1989, shortly after Webster's murder, Barnard left several urgent messages for Luitingh. Believing Barnard had a problem with his pension money, Luitingh went to see him. He said he did this despite knowing that Verster would be angry because he did not like his men to be in contact with agents who had been fired.
Luitingh said Barnard confessed that he had shot Webster. Luitingh was shocked and surprised, and left as quickly as possible because he did not want to be associated with Barnard and did not believe Barnard that it had been a CCB project.
Luitingh testified that an internal investigation was launched by General Krappies Engelbrecht, former head of the security police, and Badenhorst, who was the defence force intelligence chief-of-staff in December 1989.
Luitingh suspected that the final crunch had arrived when advocate Anton Lubowski was assassinated. He said he was questioned on numerous occasions by Engelbrecht and Badenhorst, who wanted to know everything he knew about the CCB and Barnard. He said he told them Barnard had confessed to Webster's murder.
Luitingh claimed Badenhorst intimidated him. He said Badenhorst told him the Webster case was over and threatened to hit him if he ever spoke about Webster again.
After hearing Badenhorst's evidence before the Harms Commission in which no mention was made of Barnard's confession about Webster, Luitingh made a false statement to the commission. Later he told the truth to an inquest for Webster.
He claimed he, Verster and their legal team had decided he should lie to the Harms Commission. He said Judge Louis Harms was misled by members of the police and defence force. It had been regarded as being in the national interest to do so.
At the time Luitingh was convinced Webster's murder had not been a CCB project, but he said he now believed it might have been a CCB project.
He said it was possible Barnard might have rejoined the CCB after being fired. There was no record of him ever being fired.
Luitingh denied Barnard was ever appointed as a hitman for the CCB.
He said Barnard was lying when he denied their conversation about Webster.
On Wednesday Webster's long-time companion, Maggie Freedman, recalled how he was gunned down outside their house in Troyeville, Johannesburg, while unloading plants from a bakkie.
Freedman said she heard a noise that sounded like a car backfiring and then a car accelerating. She saw Webster stumbling and holding his chest.
She was not hysterical, because she did not realise how serious it was.
She had not seen Webster's attackers and would not be able to identify them.
Freedman told the court Webster had been politically active in attempts to reform or overthrow the apartheid government.
The trial continues.