Bo Xilai denounced his wife's videotaped testimony about a French holiday villa allegedly given to the family as a bribe during the second day of his trial yesterday.
The hearing also heard the first detailed account of events leading to the murder of Briton Neil Heywood.
The trial moved to the embezzlement charge - the second of three allegations against Bo - yesterday afternoon.
Gu Kailai, looking thin but calm in an 11-minute video clip, said her husband knew about the roughly 16 million yuan (HK$20 million) villa in Cannes.
He was also aware of other bribes including money, air tickets and overseas trips, provided by businessman Xu Ming to her and their son Bo Guagua . "He should know about it," Gu said. "I told him."
Bo, continuing his defiant court performance from the opening day, dismissed his wife's testimonies as the crazy utterings of a mentally unstable woman.
She had compared herself to a historical assassin Jing Ke, telling him she felt "heroic" when killing Heywood.
"She has changed, become insane and lied often," Bo said, according to the transcript released by the Jinan court.
"Under the circumstances of her mental illness, the investigators placed huge pressure on her to expose me," Bo said.
"Her testimony was given under psychological pressure, and driven by hope of a reduced sentence."
Bo said he had twice requested that Gu testify in person at the trial, but the court said Gu didn't want to do so.
Bo also dismissed other written testimony the court heard yesterday over the bribe-taking charge - including from his former right-hand man and Chongqing police chief Wang Lijun - as "nonsense".
"Ninety-nine per cent of the evidence the prosecution has provided has nothing to do with me," Bo said.
"I can say with absolute certainty that I know nothing about flight tickets, hotels, travel, Africa and the electric bike."
The court heard the fullest account so far on how the relations between Heywood and the Bo family broke down and of the motives behind his murder.
Gu said she became worried after Guagua, who was studying in the United States, told her Heywood had threatened him after business arrangements involving the villa in Cannes went sour. "In 2011 Guagua's security was in danger and Bo was definitely aware of that," said Gu.
Gu said she discussed the threats with Wang Lijun and they made "a blacklist of suspicious people", including Heywood.
"We were worried Guagua would be killed in the US, and I read Guagua and Neil Heywood's e-mail exchanges so I became more worried. Although Wang said he arranged security for Guagua I was not relaxed at all. That's why the November 15 murder happened."
The country's most dramatic trial started on Thursday as Bo was accused of bribery, embezzlement and abuse of power.
Unlike many senior officials previously, who have made confessions effortlessly, Bo opposed every single charge against him.
The trial will continue for a third day today when Bo is tried on the charge of abuse of power, the most sensitive of the three.
A person familiar with the case said Meng Jianzhu , the nation's security tsar, arrived in Jinan on the eve of the trial to ensure it went smoothly.
"The officials and judges are satisfied with the first day of the trial," said the source.
Two sources close to the Bo family said the French villa accusation, which was at the centre of a tense debate in the courtroom yesterday, may not be included in the final verdict on Bo.
"Regarding the bribery charge against Bo, the final verdict is very possibly to be made without mentioning the villa," said one of the two, adding the final amount of Bo's bribery charge would be about 6 million yuan.