Christopher Moger, QC, for Josephine Rowland - the tycoon's widow - said yesterday that the Harrods owner had "somewhat grudgingly expressed regret" for the incident
Mr Rowland vowed to take civil legal action against Mr Fayed over the alleged break-in after the Crown Prosecution Service advised there was "no realistic prospect of conviction" over the charges.
Mrs Rowland took up the cudgels after her husband's death last July.
Yesterday, during the first day of what is expected to be a two-week hearing at the High Court, Mr Moger said there appeared to be some progress over the apology because "there is now a somewhat grudging expression of regret".
In a summary of the defence case, the court was told: "The defendants do not contend they were authorised to open the box and copy documents and regret any distress caused."
Mr Moger said the case was in some ways no different from "an ordinary burglary in which the burglar says, `yes, I was there, yes, I broke in, but honest I didn't steal anything'."
But it differed in that it was "the last word in inside jobs" - the insiders being the gang of senior members of Harrods staff, some of whom still worked for Mr Fayed.
The gang is alleged to have included Mark Griffiths, Mr Fayed's personal secretary; John Macnamara, his director of security, who was once a Metropolitan Police detective chief superintendent; Paul Handley-Greaves, his chief bodyguard; and Robert Loftus, his director of security.
Mr Loftus was not a defendant in the case, Mr Moger said. He has since left Harrods and it was he who told Mr Rowland about the break-in.
Mr Moger alleged that the "burglary" was part of Mr Fayed's long-running campaign to overturn a Department of Trade and Industry report on his takeover of Harrods in which he was called a "liar and a fraud".
Documents from the deposit box were used by Mr Fayed in attempts to persuade Mr Rowland, whom he had fought for control of Harrods, to sign a statement.
The statement was to admit that Mr Rowland had bribed the then junior trade and industry minister Michael Howard MP - later to serve as Home Secretary - into appointing inspectors to carry out the Harrods inquiry.
Further attempts to persuade Mr Rowland to admit bribery involved offers of pounds 10 m and ownership of the shirtmakers Turnbull and Asser.
Mr Rowland refused them all and a Commons investigation later rejected Mr Fayed's allegations against Mr Howard.
Mr Fayed denies authorising the break-in on 6 December 1995 and also denies charges of conspiracy to defraud and theft.
The judge was told that Mr Fayed now admitted he knew about the break- in and copying, and had seen some of the documents. But he denied authorising them.
Valuables from the box, including emeralds, rubies, rare Tibetan coins and a gold cigarette case, have never been recovered.Reuse content