A witness in an Offaly murder trial says he saw a few men hanging around the laneway near the victim's home on the day he was killed.

Ross Allen of Kilmonaghan Lodge, Clara in Co Offaly and Matthew Gralton of Mount Prospect in Roscommon deny murdering Christy Daly.

Gary Ganude had helped Mr Daly tow his car back to his caravan near a bog just outside Clara in Co Offaly when, in the early hours of December 29th 2013, he said they saw a few men hanging around a nearby laneway.

He said Mr Daly wondered what they were doing there at that hour.

Later, the 48-year-old father of eight visited his brother Michael in Navan. He said his brother was "very happy" and did not indicate that anything was troubling him.

Mr Daly's body was found in a drain near his burnt out caravan nine days later. He had been beaten and shot a number of times.

The prosecution believes he was killed by two members of a Dublin gang after a bag containing €30,000 worth of drugs went missing.

Ross Allen is accused of leaving it near his caravan and blaming Mr Daly for taking it when he could not find it.

Both he and his co-accused Matthew Gralton are alleged to have played a role in getting the assassins involved.

They have both pleaded not guilty to murder.