Sheridan suggested News International had been prepared to spend millions of pounds to overturn his victory in the defamation case in 2006.
The allegation was denied by Bob Bird, editor of the News of the World in Scotland, who told Sheridan at the High Court in Glasgow: "I have no idea whether Mr Murdoch even knows you exist."
Mr Bird insisted there had been nothing "underhand" and that he knew nothing of accusations by Sheridan of illegal phone-tapping.
Sheridan, 46, and his wife, Gail, 46, deny committing perjury during the litigation in the Court of Session in Edinburgh, when a jury awarded the former MSP 200,000 damages for allegations about his private life.
Mr Bird said his paper had lodged an immediate appeal and set about trying to find evidence against Sheridan which would correct "a gross miscarriage of justice". Within a week, there had been "calls galore" from women providing new leads and a call through which a secretly-filmed video had been acquired. In the tape, Sheridan is alleged to have confessed.
Sheridan claimed to Mr Bird the "concoction" of the video had been part of News International's underhand and shoddy dealing going into overdrive.
He continued: "The message from the top of your organisation was to get Sheridan at any cost, whether by legal or illegal means."
Mr Bird said: "No, that's not true."
He disputed that he had been under pressure to deliver Sheridan's "head on a platter", and said there had been no discussion with Andrew Coulson, then the paper's editor in London and now the Prime Minister's top spin doctor, about "how many millions" he was willing to spend to have Sheridan destroyed.
"It never got to the stage where we thought how many millions we would have to spend, or how many thousands… within a week of the trial we had some new brilliant evidence that you lied in court," said Mr Bird.
Sheridan referred to Glenn Mulcaire, a private investigator who was jailed in England with a News of the World journalist for hacking into phone messages. He said evidence might be led in the current trial that Mulcaire might have been involved in tapping Sheridan's phone.
"Are you insisting that neither you nor your staff instructed Mr Mulcaire, or any other private investigator, to carry out such activity?" Sheridan asked.
"I certainly did not instruct that. I have no knowledge of that," said Mr Bird.
One of the women who has alleged an affair with Sheridan is Anvar Khan, a News of the World columnist.Mr Bird agreed he had asked Ms Khan to make a telephone call to Sheridan which would be taped and used to back up her account of a visit to a swingers' club. She had refused.
Similarly, Fiona McGuire, who claimed a four-year affair with Sheridan, had not agreed to make a call.
Mr Bird disputed Sheridan's description of such a call as "entrapment" and said it was merely "getting evidence… getting somebody to admit to something on tape."
The trial continues.