Van der Westhuizen and former SA Police Colonel Jan Griebenauw are seeking amnesty for their roles in any criminal activities that arose from the 1986 military operation, codenamed "Katzen".
The operation, named after Van der Westhuizen and ex-SA Army chief General Kat Liebenberg, aimed to establish a surrogate party, the Xhosa Resistance Movement, to topple the Transkei and Ciskei homeland governments.
It was envisaged that the "resistance movement" would amalgamate the two homelands as "Xhosaland" while East London would remain a "free port".
Conceived in June 1986, the plan aimed to counteract their use as safe bases by the liberation movements and thus stabilise the Eastern Cape with a power bloc against the African National Congress and United Democratic Front.
Operation Katzen was terminated long before its scheduled completion date in December 1987.
The plan was exposed by ex-Transkei military ruler Bantu Holomisa at the TRC's Port Elizabeth hearings in May 1996.
Katzen's planners identified ex-Ciskei security chief Charles Sebe, then being held at Middledrift prison for a failed 1983 coup attempt, as a potential leader of the XRM. Sebe was sprung from Middledrift by SADF Special Forces on September 25 1986.
George and Kaizer Matanzima firmly backed the amalgamation idea.
Others who backed the plan were Chief Lent Maqoma, Namba Sebe who was prepared to lead the XRM, and Ben Nomoyi.
Then Transkei Defence Force Brigadier Bantu Holomisa was also considered as an alternative XRM leader.
The plan also included the removal of Ciskei's self-declared President-for-life Lennox Sebe, brother of Charles, who was described as "a thorn in the flesh" of the South African government and who was seen as a major stumbling block to the idea.
Lennox Sebe's son Kwane, head of the Ciskei's "elite unit", and his second-in-command "Bullet" Ngwanya were also abducted from the Amatola Hotel in King William's Town on September 24 to keep them out of the way.
In lengthy testimony in Afrikaans on Tuesday in a near empty Cambridge Catholic Centre, Van der Westhuizen told of the SADF's difficulty in combating the African National Congress and the United Democratic Front in the Eastern Cape.
Sketching the motivation for Operation Katzen, Van der Westhuizen said even though the SADF had to accept more responsibility in the 1980s for supporting the SAP in combating "terrorists", it always favoured a political solution to such a conflict.
But in the Eastern Cape in the mid-1980s, "counter-revolutionary operations" such as cordons, roadblocks and searches, in conjunction with the State of Emergency regulations, were not sufficient to curb the activities of the liberation movement.
There was "great intimidation of the population, especially those who were not part or willing to be part (of the liberation struggle), terror attacks, a variety of revolutionary speeches, and "liberated zones" that on instructions of the ANC had to be made "ungovernable".
The bantustans, where the SADF was forbidden from operating, also harboured "terrorists".
The SADF, he said, carried out the policies of the government as the constitutionally empowered protector of the state.
"All professional defence forces serve the government of the day." Their activities included unconventional counter-revolutionary plans and strategies like Operation Katzen.
He said "stabilising" Transkei and Ciskei was in his "tactical interests" as they were in his Eastern Cape "area of influence".
Within the hall, it was like a "who's who" of the 1980s, with high-powered legal representatives for unseen but familiar men, implicated in various incidents testified to by Van der Westhuizen.
Supporting affidavits were submitted on behalf of Vlakplaas founder and security police C-section commander Brigadier Willem Schoon, former police commissioner General Johan Coetzee, SADF Colonel Alex van Rooyen and SAP Brigadier Sakkie van der Merwe.
Lawyers representing PW Botha and ex-Defence Minister Magnus Malan; ex-SADF chiefs Generals Jannie Geldenhuys and Liebenberg; Chief George Matanzima and Chief Maqoma and others were also present.
The hearing will continue on Wednesday with further testimony from Griebenauw.
The amnesty committee is scheduled to sit in East London for the next four weeks for a variety of Eastern Cape applications involving failed Ciskei and Transkei coups.