The trial of the man accused of killing Daniel Morcombe has been played a covert recording of him admitting to the teenager's murder, including that he choked him and disposed of his body.

Brett Peter Cowan has pleaded not guilty to the 2003 murder on Queensland's Sunshine Coast, and the defence has previously said the confession was false.

The court was played a video of a meeting between Cowan and an undercover police officer posing as a crime boss at the Perth Hyatt.

Cowan confides the death of Daniel is his "deepest, darkest secret" that he had not told anyone.

On the tape, Cowan says he offered the teenager a lift to a shopping centre, but instead took him to a house near an old sand mine at Beerwah.

Cowan says Daniel panicked and he then choked the teenager.

Undercover officer: "What happened in the house?" Cowan: "I never got to molest him or anything like that. He panicked and I panicked and grabbed him around the throat and before I knew it he was dead."

He then says he put the schoolboy's body in the back of his four-wheel drive, drove a short distance, removed his clothes and dumped him in a creek.

Cowan: "I've stripped him off and [got] trees and all that sort of, branches, and covered his body with that. His clothes I took back with me and threw them into the creek."

Cowan says he went back about a week later and found a fragment of bone, but the rest of the body was gone.

Undercover officer: "Had it hit the press by then?" Cowan: "I think so, yeah." UO: "So you're thinking, I better do something here?" Cowan: "Just in case, I went and took a shovel back... went down to where I put him and I only found a fragment of bone. The rest of it was gone." UO: "In a week?" Cowan: "In a week. The rest of it was gone. Like there was a patch of - you could tell, cause it was summer, you could tell that there was a patch on the ground... [There was a] little piece of bone... I think that was part of the skull. And I just buried it, broke it up with the shovel."

Other recordings from a covert police operation in Perth prior to Cowan's arrest in August 2011 have been played to jurors.

The court heard the recording was made on August 9, 2011, in a Perth hotel room while Cowan was meeting "Arnold", the supposed boss of a major criminal gang.

Under cross-examination, "Arnold" confirmed to the defence that police "dangled the carrot of big jobs and big money" in front of Cowan.

The defence has previously told the jury Cowan's confession is false and he was told by someone else where Daniel's remains were hidden.

Operatives involved Cowan in false criminal activity

An undercover officer referred to as UCO 452 told the court they involved Cowan in various false criminal scenarios to convince him they were part of a well-organised crime gang.

The scenarios included prostitution, false passports, the blood diamond trade, illegal firearms and loan sharking.

In one recording the undercover officer takes Cowan to meet another operative posing as a corrupt police officer.

Sorry, this video has expired WARNING: Contains graphic and offensive language. Covert recording

He tells Cowan there is a Queensland subpoena for him to appear at a Brisbane inquest, and afterwards one of the operatives tells Cowan that he looks worried.

The operative tells Cowan not to worry, assuring him the gang will make it "go away" as long as Cowan is honest with the gang boss and tells him everything.

Cowan is also heard telling the officers about changing his name by deed poll to Shaddo N-unyah Hunter.

Cowan explained that Shaddo was his dog's name, N-unyah is short for "none of your business" and Hunter was something he heard on TV.

The trial is continuing.