The ex-lover of Spain’s former king Juan Carlos has told a court in Madrid of the “chilling” moment when she claimed the head of the country’s intelligence services threatened her and her children on the monarch’s orders. Corinna Larsen told the court Félix Sanz Roldán met her in London after her relationship with the king had ended to warn her that if she did not follow his instructions he could not guarantee her safety. She claimed she later returned to her home in Switzerland where she discovered a book about the death of Princess Diana and subsequently received a cryptic phone call about tunnels, which she took to be an allusion to the princess’s fatal accident in 1997. The allegations came during a one-day libel trial brought by Sanz Roldán, the head of intelligence from 2009-19, against a former police officer, José Manuel Villarejo, who he claims defamed him in a 2017 TV interview in which he said he had threatened Larsen’s life. Villarejo, who has been on remand since 2017 and is awaiting trial on separate charges including extortion, money laundering and bribery, could face up to two years in prison if convicted in the libel case and on another charge of making a false complaint. Larsen, also known as Corinna zu Sayn-Wittgenstein, claims she was persecuted by Spanish intelligence agents following the end of her relationship with Juan Carlos, who abdicated in 2014 amid plummeting popularity. She said in her affidavit to the court in Madrid that threats were made against her because she held “information and documents concerning financial and business dealings of the king emeritus and other members of the royal household”. Giving evidence via video link from Westminster magistrates court in London on Friday morning, Larsen said she believed agents from a security firm acting on behalf of Spain’s national intelligence centre (CNI) had occupied her home and office in Monaco in April 2012, and that CNI officers intended to steal her documents, wipe computer files and install surveillance equipment. After she was asked to vacate her home and office for five days so they could be “swept” by the agents, she complained to Juan Carlos. The following day she received an email from a man she believed to be Sanz Roldán, the CNI head, which claimed it had all been a misunderstanding. She told the court Sanz Roldán came to see her a month later at the Connaught hotel in London acting at the king’s behest. “The general explained various conditions and instructions and recommendations that I should follow,” said Larsen. “He said unless I followed them, he could not guarantee my physical safety or the physical safety of my children. Of course [the words] terrified me. I think anyone would be terrified. The fact that the head of the Spanish intelligence services travelled to London to meet me was chilling in itself.” Larsen then returned to her home in Villars-sur-Ollon in Switzerland, where she found that a copy of a book about the death of Princess Diana had been left on her coffee table. Early the following day, she told the court, she received a phone call from an unknown number and was told, in Spanish, that there were “many tunnels between Monaco and Nice”. The phone call, said Larson, brought home “the reality of the threats and of the danger I found myself in”. She said she had met Villarejo in April 2015 after one of her closest friends told her Villarejo had information about how the CNI intended to implicate her in criminal activity. It was during that two-hour meeting that Larsen told him of the meeting at the Connaught and what she described as the threats from Sanz Roldán. Sanz Roldán denied issuing any threats when he gave evidence on Friday and said Villarejo’s comments during the TV interview were a lie. “I have never, ever threatened a woman or a child – ever,” he told the court. He said his presence in London in May 2012 was a matter of public record but he could not say any more because he was subject to the laws governing intelligence work. However, he stressed the CNI was only allowed to operate in Spanish territory and within Spanish laws. The public prosecutor dropped the libel case against Villarejo later on Friday but the state’s attorney did not follow suit. Juan Carlos announced he was leaving Spain in August after a series of damaging allegations about his financial arrangements that have tainted the monarchy and embarrassed his son, King Felipe VI, who has stripped him of his annual stipend. It is alleged in documents from the Swiss prosecutors that Juan Carlos received a $100m “donation” from the king of Saudi Arabia that he put in an offshore account in 2008. Four years later he allegedly gifted €65m from the account to Larsen.