Simon Berkowitz, 45, said a Labour supporter had given him the 'meaty, spicy' document, stolen from Mr Ashdown's solicitors.
After the News of the World, to which he tried to sell the document for pounds 30,000, had printed a story about it, prompting questions in the House of Commons, he thought the episode had 'deep political implications' and that he had been used.
He told the court: 'I firmly believe . . . it was an attempt to smear Mr Ashdown but it could have been an indirect attempt to smear the Conservative Party as well because I was a Conservative member.'
Mr Berkowitz, a painter and decorator of Hove, East Sussex, denies burgling the City of London offices of solicitors Bates, Wells and Braithwaite in January and handling the stolen original of the document. He also denies stealing pounds 223.63 cash.
Rumours about the contents of the stolen aide memoire spread and just before the election Mr Ashdown was forced publicly to admit his affair with Patricia Howard.
A 'bit of a doom and gloom merchant Labour supporter', handed the document to Mr Berkowitz, he told the court, after the two had discussed the recession in his local pub, The Wick, on the weekend of the alleged theft.
Mr Berkowitz said he told the man, whom he described as being about 6ft tall with dark hair and 'dressed in student style', that the building trade was suffering a slump and that he 'would not mind some extra cash'. Mr Berkowitz said he knew the man by sight but not by name.
'He said he had something there that night that might be of interest to me . . . I sat down and read it. I was absolutely stunned . . . I thought: 'Well, hello, there's something a bit spicy here'.'
Mr Berkowitz said he did not think about how the man, who did not ask for money, had come to have the document. He thought of selling it to the Brighton Evening Argus for pounds 5,000, he said, but his former wife, Maria Watson, said he should approach the News of the World.
He said he 'presumed' the two-page typed document on cream-coloured paper with red biro signatures and notes on the top and the bottom was an original. Earlier, Andrew Phillips, senior partner at Bates, Wells and Braithwaite, said the original document had been typed on white paper.
The first time he knew the document was stolen, he said, was when the News of the World ran the article on 2 February. He told the court he was shattered to see that the newspaper had used his first name, in breach, he claimed, of an anonymity agreement the newspaper had signed.
He said he was scared stiff that police would 'wrongly link' him with the theft. Ms Watson, he said, had torn up the document.
Mr Berkowitz rejected suggestions from David Bate, for the prosecution, that he was making up the pub story and that he had been the thief.
The case continues on Monday.Reuse content