Two former friends have told conflicting stories to the William Tyrrell inquest about whether a driver was seen pushing something down into a car footwell the day the three-year-old went missing.

William vanished while playing at his foster grandmother’s home in Kendall on the New South Wales mid north coast on 12 September 2014.

A Kendall man, Tim Palmer, told the coronial inquest on Wednesday he had had a conversation with a friend, Michael McInally, in 2018 in which McInally said he needed to get something off his chest.

He said on the day William went missing he had seen a white sedan driving “crazily” down Batar Creek Road and the driver using his left hand to push something into the passenger side footwell, Palmer said.

“He said if I was to tell anyone this story, he would deny it,” Palmer told the NSW coroners court.

McInally then addressed the inquest and disputed several elements of Palmer’s story.

He said that in fact he had been driving down Combyne Street when he saw a person holding their left hand up as if to get better phone reception.

Asked by the coroner why he would tell a story in 2018 about how he had seen someone in 2014 trying to get phone reception, McInally said: “I don’t know.”

“I was in a drunken state,” he said. “I don’t remember half of the conversation.”

But Palmer’s version was wrong, he said.

McInally said he remembered the car as he had never seen it in the area before.

Palmer said he believed his decision to tell police about the 2018 conversation had led to the longtime friends falling out.

The inquest resumes on Thursday in closed court.