King Albert's youngest son, Prince Laurent, was unaware funds given to him from military officials used to pay for renovations to his villa could have been illegal, according to a transcript of his questioning by police read to a court Tuesday.
The prince said he had trusted an adviser, Col. Noel Vaessen, to handle the renovations.
"When my confidant, whom I fully trusted, assured me that he would take care of my furnishings via the navy, I thought that was done legitimately," the prince said during his police questioning. "Who was I to question him?"
The transcript of testimony given by Laurent to a prosecutor was read out to a packed courthouse in eastern Hasselt, where 12 people stand accused of pocketing Ђ2.2 million (US$2.9 million) allegedly siphoned from the navy's budget.
Several of the defendants claim the 43-year-old prince benefited from the alleged fraud, including Vaessen, who has alleged Laurent knew that Ђ175,000 (US$232,000) in navy funds were used to refurbish his home on the outskirts of Brussels during the 1990s.
Prosecutors, however, have not charged Laurent with any wrongdoing and said the prince was not directly involved in the fraud ring.
However, in an unprecedented move, Laurent is to testify to the court on Tuesday.
It will be the first time a senior member of Belgian's royal family will have taken the stand in a court trial. Although the king has legal immunity, the prince does not. The prince's father, King Albert II, cleared a decree last week allowing Laurent to be called as a witness.
According to the transcript read out to the court, Laurent told police he "did not know how much money and what it was spent on during the renovation" to his mansion.
He acknowleged earlier claims he spent all the money he received during his bachelor days.
"I had no means to provide for a decent lifestyle," Laurent said.
He said he had trusted Vaessen to handle his renovations and added he did not see any financial accounts of the refurbishments undertaken at his villa.
The prince was questioned by police at a secret location late Monday.
The scandal has already raised widespread questions over how Belgium's royal family spends taxpayers' money and has caused a political storm in the country.
Under growing pressure to act, Prime Minister Guy Verhofstadt said he would launch a "serene debate" after the trial was over on how Belgium finances its royal family.
The prince arrived with his lawyer and a police guard, amid much media attention at the courthouse in Hasselt, 80 kilometers (50 miles) east of Brussels.
The judge accepted Vaessen's request on Monday that Laurent be called as a witness in the trial.
The 12 defendants, many of whom are ex-navy officials, have been charged on several counts, including falsification of documents, fraud and larceny, officials said. The accused allegedly drafted false bills to divert cash and goods from the navy, reports AP.
Vaessen, the main defendant, pleaded not guilty to the charges Monday and said he had done nothing wrong except help the prince out of a tight spot.