KENNETH LAY, the former chief executive and chairman of Enron, yesterday blamed Andrew Fastow, the group’s former chief financial officer, as well as short sellers and journalists for the collapse of the energy giant.

Mr Lay told the court: “It was what Andy did and hid and what The Wall Street Journal with the help of short sellers wrote that kicked off a run on the bank that we just couldn’t stop.” He added: “I accept full responsibility for everything that happened at Enron. Having said that, I can’t take responsibility for illegal acts that I had no knowledge of.”

Mr Fastow has pleaded guilty to fraud charges and faces ten years in prison.

The comments came as Mr Lay claimed that his American dream had turned into an “American nightmare”.

Mr Lay, who is accused of conspiracy and fraud over the energy company’s collapse, protested his innocence on all counts and told of his devastation when the group collapsed. He faces the prospect of a long prison term for his alleged role in Enron’s failure.

Along with Jeffrey Skilling, Enron’s former chief executive, Mr Lay is on trial accused of lying about the financial state of the company, once America’s seventh-largest corporation before its dramatic collapse in 2001, with debts of $31.8 billion (£17 billion).

Mr Lay, 64, is charged with six counts of fraud, mainly related to the period from August 2001, when he took over the chief executive’s role from Mr Skilling, who quit suddenly, to December 2001, when the company sought bankruptcy protection.

Responding to questions from George Secrest, his defence lawyer, about what it had been like to sit in the courtroom in Houston, Texas, and watch the Enron trial for the past 13 weeks, Mr Lay said: “It’s been interesting. A lot of interesting testimony, a lot of interesting people, a lot of allegations, a lot of lies, a lot of misinformation and some truth.”

Mr Lay added that he had been distraught at the collapse of the company, which he founded in the 1980s. “I guess you could say in the last few years I’ve achieved the American nightmare,” he said. Mr Lay said that he had been distraught by the “hurt and destruction and pain” that came with Enron’s collapse.

“I’m sure there’s absolutely nothing in my life, including the loss of life of many of my loved ones, that even comes close to the same level of pain, and the same enduring pain, that has caused,” he said.

Mr Skilling had spent the previous two weeks on the stand and faces 28 counts of fraud, conspiracy and insider trading. The charges span from 1999 through to his resignation in August 2001. Last week Mr Skilling told jurors that he and Mr Lay were “taking a stand” so that former workers could look back with pride.

Mr Lay, unlike Mr Skilling, is not charged with improper stock sales. However, he did make heavy use of a credit line with Enron. He repaid more than $70 million in company loans with Enron stock in 2001.

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