Bo Xilai has admitted “some responsibility” for the government funds he is accused of embezzling.
The disgraced Chinese politician told a Jinan court that his wife Gu Kailai had taken the money, and he knew nothing about it at the time.
However, Bo Xilai admitted he did not do enough to stop it.
“I feel ashamed. I was too careless,” he said.
Bo Xilai also mocked a former colleague who had accused him of being actively involved in the embezzlement.
He said Wang Zhenggang’s testimony was “illogical”, and that only a fool would discuss bribery in front of witnesses.
The scandals involving Bo Xilai’s family, which used to be one of the most elite in China, have captivated the country.
Bo Xilai, who rose to become the Communist Party chief in Chongqing, denies bribery and corruption – and also the charge of abuse of office, which the court has not yet examined.
He is accused of using his position to cover up for his wife Gu Kailai, who has been convicted of murdering British businessman Neil Heywood.
Bo Xilai’s ex-police chief Wang Lijun, his close colleague in Chongqing, is also testifying against him.
Many analysts assume the outcome of the trial, now in its third day, has been predetermined – with a guilty verdict.
But Bo Xilai has given what, for China, is an unusually vigorous defense, observers say.
They say the court hearing is as much about getting rid of a popular politician as it is about criminal wrongdoing.
Foreign media are not allowed into the trial, but the court in the eastern city of Jinan has been posting regular updates on China’s micro-blogging site Weibo (in Mandarin).
“I feel I should take some responsibility for the money ending up in Gu Kailai’s account. I feel ashamed,” Bo Xilai told the court.
“I failed to retrieve the money later, and that’s a factual statement, but can you say I had the intention to embezzle the money? No.”
Bo Xilai was referring to a 5 million yuan ($800,000) sum of money in his wife’s account, which had alleged been earmarked for a Dalian city construction project.
Earlier in Saturday’s proceedings, Wang Zhenggang, former urban planning director of Dalian, gave testimony against Bo Xilai, who used to be Dalian’s mayor and therefore Wang Lijun’s boss.
Wang said he saw Bo Xilai make a call to his wife and explicitly said he was going to funnel money to the family.
Bo Xilai refuted the testimony, saying he had no need for the money as his wife was a successful lawyer and his son’s study in the UK was funded through a full scholarship.
He also mocked Wang Lijun’s testimony, saying: “Is this in line with the way an embezzler would think?… Would I say something this sensitive on the phone?”
“It is not even what the most stupid corruption offender would do,” he said.
On Friday, Bo Xilai described his wife, Gu Kailai, as “insane” because of her testimony implicating him in corruption.
She had said that wealthy Chinese entrepreneur Xu Ming bought gifts for the family in order to gain favors.
Gu Kailai also said she felt that Neil Heywood – whom she has been found guilty of killing – had posed a threat to her son, Bo Guagua.
But Bo Xilai dismissed her testimony, reportedly saying: “In her unstable mental state, prosecutors put pressure on her so she would turn on me.”
Bo Xilai’s downfall was seen as the biggest political shake-up to hit China’s ruling elite in decades.
In February 2012 his police chief, Wang Lijun, fled to the US consulate in Chengdu amid an apparent fall-out with Bo Xilai.
Shortly afterwards, Chinese authorities announced that they were reinvestigating the death of Neil Heywood, who died in a Chongqing hotel in November 2011.
The release of trial proceedings during Bo Xilai’s hearing are in sharp contrast with Gu Kailai’s trial in August 2012. That hearing took just one day and few details were released.
The Chinese authorities are on high alert for any unrest that might be triggered by Bo Xilai’s trial – with police closely guarding a security perimeter that spans several miles around the court.