GIPSY leader Hughie Smith threatened to hire a gang to torch the homes of a travelling family he said was camped illegally on a caravan site he controls, a court was told yesterday.

Harrogate magistrates heard claims that when National Gypsy Council leader Mr Smith went to the site at Thistle Hill, Knaresborough, last December, accompanied by his nephew Charlie Smith, 37, the younger man "stuck the nut on" a member of the family and bust his nose.

Hughie Smith, 73, who lives at the Harrogate district's other permanent gipsy site at Springs Lane, Bickerton, near Wetherby, has denied using threatening behaviour with intent against Peter Varey. Charlie Smith, who also lives at the Bickerton camp, denies assault on Mr Varey's 26-year-old son James.

Kate Hunter-Gordon, prosecuting, said Hughie Smith was the Knaresborough site's warden, and his nephew was manager.

Mr Varey senior and his family, including his wife, Jean, and daughter, Caroline, 19, and another son, also called Peter, his wife and their two children occupied three caravans close to the site entrance.

The Smiths had arrived during breakfast and an argument developed between Charlie Smith and Mr Varey senior, James had gone to investigate and been headbutted and punched by Charlie before he retaliated and residents gathered to watch them fight, the court heard.

She said Hughie Smith told the Vareys: "We are going to burn you out.

"I will be back with an army of men from Manchester to sort you out."

The trial continues.