OTTAWA - A onetime top aide to Brian Mulroney says the ex-prime minister intervened in a project that's now at the centre of a $500,000 cash-payments scandal and ordered him to "get this done."

In 1990, Norman Spector says, the prime minister handed him a tiny white paper and told him to move ahead with a plan to build military vehicles in Nova Scotia.

The directive flew in the face of opposition from bureaucrats in the Department of National Defence, from military brass and from the most senior bureaucrat in the country, Spector told The Canadian Press in an interview.

They each had their own concerns about a proposal from German arms maker Thyssen Industries to open a plant in exchange for a federal grant and a contract to build light-armoured vehicles.

"There was tremendous opposition in the system,'' Spector said.

He says arms lobbyist Karlheinz Schreiber was embroiled in a bitter dispute with senior military officers, who were pleased with similar vehicles already being built by GM in southern Ontario.

Federal bureaucrats also opposed the project because they saw it as an attempt by Thyssen to get around tough laws in Germany that banned weapons sales to pariah states. They were concerned Canada would be a staging ground for questionable international sales.

And the clerk of the Privy Council -- Paul Tellier -- was so dead-set against Thyssen's plans that he tossed arms lobbyist Schreiber out of his office, Spector says.

Then one morning Mulroney delivered instructions, he says.

The marching orders came during a regular morning meeting between the prime minister, Tellier, his top bureaucrat, and Spector, his political chief of staff.

Mulroney would hold a stack of post-it-sized papers -- each one referred to a different issue -- and hand each sheet to either his top civil servant or his top political staffer.

He would flip through the white papers, occasionally licking them for traction, and handed the majority of them to Tellier so that the federal bureaucracy could deal with various issues.

On this morning, Spector says, one of the rare sheets he received referred to the proposed Bear Head project in Nova Scotia to build light-armoured vehicles.

He says that transfer of responsibility for Bear Head from bureaucratic to political hands came with a simple instruction from the boss.

"(Mulroney said), I want you to get this done,'" Spector said in an interview Thursday.

"So the project was transferred to me. (The Privy Council Office) gave me the documentation which was quite extensive."

Schreiber testified before a Commons committee Thursday that he agreed to pay Mulroney $500,000 for help -- after he left office -- getting the project off the ground.

Mulroney spokespeople have said the money was for several services, including help with a pasta business. But Schreiber heaped ridicule on the pasta-business claim, saying the idea of opening such a business only occurred to him years later.

Schreiber delivered $300,000 in cash in 1993 and 1994, then stopped making the payments, and says he's been livid for years at Mulroney since hearing that he broke a promise to move the military project along.

Spector says Mulroney did at one point appear to throw in the towel on Bear Head -- on Dec. 16, 1990.

After getting instructions to move the file along, Spector says, he worked to put a price tag on the Bear Head project. Mulroney had reportedly been told the project wouldn't cost a dime.

Spector said that at the urging of Nova Scotia minister Elmer MacKay, he agreed to meet Schreiber.

He held a separate meeting with other key players on the issue, including then-defence minister Bill McKnight.

Spector said that meeting went nowhere and he told the participants he would only meet with them again if they signed their names to a single, agreed-upon cost analysis for Bear Head.

When they came back, the final price tag was $100 million.

Spector was with Mulroney in the back of a limousine on the way to a speech in Buckingham, Que., on Dec. 16, 1990, when he says he raised his cost concerns with the boss.

"In that case, the project is dead,'' is how he quotes Mulroney's response. He describes the conversation in an afterword to William Kaplan's book, A Secret Trial.

Spector left the prime minister's office in 1991, went on to become ambassador to Israel, and came back to Canada in 1995.

He says he was surprised to hear in an e-mail from Senator Lowell Murray that his successor as chief of staff -- Hugh Segal, now also a senator -- had continued working the Bear Head project that was supposedly dead.

"It could not have gotten a head of steam again without some involvement of the prime minister's office . . . . I can't say the prime minister -- but the prime minister's office,'' Spector said.

Segal told The Canadian Press that he had minimal involvement in the file and never discussed it with Mulroney.

He said his only involvement came when he responded to a 1992 or 1993 letter from then-transport minister Jean Corbeil to consider building light-armoured vehicles in Montreal.

Segal says he checked with senior bureaucrats, was told a similar plan for Nova Scotia had already been killed, and considered the matter closed. He says he sent Corbeil a reply specifically pointing out that he had not gotten involved in the file.