Australian Federal Police counter-terrorism tsar Steve Lancaster has told a court that he undertook a “you show me yours if I show you mine” process with Australian associate editor Cameron Stewart to negotiate the terms of an anti-terror drop for the newspaper.

On July 31, 2009, four days before Stewart’s Quill-winning scoop detailing a raid on Somali terrorists on the morning they occurred, the AFP had convened crisis talks in Canberra with Stewart, AFP media manger David Sharpe and AFP deputy commissioner Peter Drennan to discuss the story’s terms, the Melbourne Magistrates’ Court heard.

The AFP was acting on behalf of several other government agencies to prevent the yarn being printed in the next day’s Weekend Australian in the interests of national security.

In addition to the information exchange, the AFP promised the newspaper they would tell them if they decided to “go early” with the operation or if rival media outlets approached them in the interim to preserve Stewart’s scoop.

Victoria Police Security Intelligence Group officer Simon Artz is facing eight charges, including wilful misconduct, of leaking information to Stewart that allegedly formed the basis for a preliminary story filed the day before the meeting that piqued the interest of the AFP’s media unit.

Defence counsel Bill Stuart has argued the bulk of Stewart’s information had been sourced from the briefing and other federal sources. In his evidence, Stewart claimed the seed was planted by Artz alone.

Under questioning from Nick Papas SC, for the prosecution, Lancaster said the “showstopper” that prompted the secret talks was Stewart’s knowledge that federal officers had enough information to charge.

He agreed with Stuart that the journalist had received a “detailed” briefing after Stewart queried whether “if the AFP had enough evidence to prosecute then why does it matter if I run my article?”.

Lancaster denied that Stewart had overtly threatened him with publication if the force didn’t disclose what the national security interests were and that his demeanour in the meeting was “professional and courteous”. He agreed that publication constituted a security risk and was content to hold off.

Stewart also apparently had some knowledge of a group of local Melbourne-based extremists, some of whom were fundraising and planning to travel to Somalia to assist al-Qaeda-linked militants al-Shabaab.

Lancaster said that if the story went to press the next day, he would have been forced to scramble 400 personnel from around the country to execute warrants early on the Saturday morning. However, the “quality” of the raid would have been “compromised to a degree”.

Lancaster agreed he had made no note that Stewart had knowledge of the name, Operation Neath. Bill Stuart pressed him on that point: “So far no-one has suggested that the word Operation Neath came out of Cameron’s Stewart mouth before Mr Drennan mentioned the name Operation Neath, do you follow?”

But Stewart had included the codename in the preliminary story he filed to The Australian’s then-editor Paul Whittaker 20 hours earlier.

The court also heard this morning from a former colleague of Artz, who cannot be identified for legal reasons, who said they “would have done exactly the same thing” if they had been in his shoes.

They said Artz had “never” leaked to the media and it was “quite abhorrent” to suggest otherwise.

In a previous interview with the OPI, the officer recalled Artz had said he was “confident” a portion of Stewart’s knowledge “had come from the Feds’ side of things”.

The defence has consistently argued that Stewart had a senior federal counter-terrorism source and that Artz was, at best, a minor player.

The committal concludes this afternoon with evidence from OPI investigator Sharon Kerrison.