Gu Kailai said she became worried after her son Bo Guagua, who was studying in the United States, told her Neil Heywood had threatened him after arrangements involving the property in Cannes went sour.
Her comments -- the first detailed account of events leading up to Heywood's death in November 2011 -- appeared in evidence at Bo Xilai's trial at the Intermediate People's Court in Jinan.
Gu, who was not in court, stopped short of directly implicating her husband -- then the Communist Party boss of the southwestern city of Chongqing -- in the killing.
"In 2011 Guagua's security was in danger and Bo was definitely aware of that," said Gu, a former lawyer.
Gu said she discussed the threats with Wan Lijun, Chongqing's police chief and Bo's right-hand man, who she described as being "responsible for Guagua's personal security in the US".
"We made a blacklist of suspicious people, including Neil Heywood. I told Bo about these," she added.
"We were worried Guagua would be killed in the US, and I read Guagua and Neil Heywood's email exchanges so I became more worried.
"Although Wang said he arranged security for Guagua I was not relaxed at all. That's why the November 15 murder happened."
According to the transcripts, which the court is posting online, Bo responded in court that his wife was "insane" and had compared herself to Jing Ke, who more than 2,000 years ago tried and failed to kill the man who would become the first emperor of a unified China.
It was "sufficient to prove that she was mentally disordered" at the time of the killing, Bo said.
Gu also outlined the web of business dealings surrounding the French Riviera villa that led to the falling-out with Heywood.
More details were provided by Patrick Devillers, a French architect who maintained a business relationship with both Bo and Gu, forged when the politician ran the industrial port town of Dalian.
He was the first manager of the villa, and was charged with negotiating "compensation" with Heywood after the Briton's involvement with the property ended.
Heywood demanded £1.4 million ($2.2 million), a figure which according to the transcripts Devillers said left him "shocked" and speechless.
"Neil Heywood sounded outraged and went on ranting about Gu and that he was tricked by her (legally) and threatened if his request was not met he would 'reveal everything'," he said.
"I felt the danger as I had never seen him so angry before."
