Elaine Doyle, 16, was found in a lane near her Greenock home more than 27 years ago.
The jury at the High Court in Edinburgh heard the strangled girl was covered with a blanket from a police car before being taken to the mortuary.
Retired detective inspector James Goldie, 76, yesterday vehemently denied he had covered the teenager’s body. “I am desperate to tell you I did not at any time cover the body,” he said.
Mr Goldie also insisted that he had not ordered anyone else to cover Elaine.
Defence QC Donald Findlay described the action as “a humanitarian thought”.
But the lawyer added: “That was a potentially catastrophic blunder by police at the scene.”
Mr Goldie replied: “I agree.”
Mr Findlay added: “It could have blown apart any chance there was of tracking down the real killer of Elaine Doyle.”
Mr Goldie was shown a number of statements he made during the long-running murder hunt. In June 2012 he told detectives that he had been informed residents in a building were looking over the scene.
Two men were also approaching the scene in a lane leading to lock-up garages.
Mr Goldie’s statement continued: “I told him – it was a young male officer – to go to tell the residents to move back into the house. He walked a few yards then turned to say he had some blankets in his panda car so I told him to place them on the garden side [fence] to hide the view of the body.”
Mr Findlay said the jury would hear “100 per cent guaranteed gold-plated evidence” that a blanket had covered the girl. He added: “Somebody should have the guts, the honesty, the integrity to come forward and say, ‘This was my fault’.”
On trial is John Docherty, 49, now of Dunoon, who denies murder. He claims that at the time he is alleged to have stripped and strangled the teenager, he was at home with his parents, who are no longer alive.
Docherty has also lodged a special defence of incrimination suggesting the culprit might be among a list of 41 names taken from files of the police investigation into the murder.
Mr Goldie agreed that police had a responsibility to ensure an innocent person was not wrongly incriminated or accused by corrupted evidence.
Mr Findlay said that whatever the motive was, covering the body was a mistake.
“Not only might it have removed evidence which might point to the guilty person, it might lead to evidence being brought into the crime scene which pointed to an innocent person.”
“Possibly,” agreed Mr Goldie.
The trial continues.