Senator Lydon's barrister, Seamus Ó Tuathail SC, dramatically revealed to the Flood Tribunal yesterday that his client believed he had proof which would undermine Mr Dunlop's evidence to the inquiry.
Mr Dunlop has claimed Mr Lydon a psychologist at the St John of God hospital in Stillorgan, Co Dublin asked him for £5,000 in return for signing a motion to rezone lands owned by Paisley Park at Carrickmines in 1992. Mr Lydon acknowledges the payments but insists they were legitimate political donations.
Last December, the PR consultant told the tribunal he met Mr Lydon in the car park of St John of God's on the afternoon of Friday, May 1, 1992 to discuss the payment before they agreed the figure would be £3,000.
He recalled he met Mr Lydon again at 9.30am on the following Monday (May 4) when he handed over £3,000 after the councillor signed the rezoning motion in his presence.
Yesterday, during the third day of cross-examination of Mr Dunlop, Mr Lydon's barrister claimed the alleged meeting between the two men on May 1, 1992 could not have occurred.
Mr Ó Tuathail said his client spent the entire afternoon at aconference of the Irish Assoc of Corporate Treasurers in Dun Laoghaire.
Mr Dunlop stood over his evidence he had met the politicianin May 1992.
He also rejected suggestions by Mr Ó Tuathail that he had "an artificially reconstructed memory" about payments he made to councillors.