The sister of a teenager who was murdered by her parents when she refused to agree to an arranged marriage saw the killing, a court was told on Monday.

Alesha Ahmed told police she watched her parents "acting together" during the murder of her older sister Shafilea Ahmed, 17, in September 2003, Chester crown court heard.

Their parents, Iftikhar Ahmed, 52, a taxi driver, and his wife Farzana, 49, deny murdering Shafilea, whose badly decomposed remains were found near a Cumbrian river in February 2004.

Alesha, now 23, told police what happened in August 2010, when she was arrested for her part in a robbery at the family home in Warrington, Cheshire, the court heard.

Prosecution barrister Andrew Edis QC described the information as the final piece of the jigsaw; until then there had been no direct evidence linking the parents to the murder.

He said it was an extraordinary thing to accuse your parents of murder, to say "you were there and watched your parents murder your sister".

He said for the past "almost nine years, Alesha Ahmed had lived under the most extraordinary of circumstances", as had the whole family. There are three younger siblings.

Alesha had told friends about the killing between September and December 2003, but she soon retracted her comments and returned to the family home where she was brought back into "silence and denial". It must have been a great strain because of her divided loyalties, Edis said.

The court heard that during a trip to Pakistan in February 2003, Shafilea had been introduced to a cousin whom her parents wanted her to marry. She drank bleach at her grandparents' house in Pakistan, which her mother had claimed was a mistake during a power cut.

Edis said there was no way anyone would pick up a bottle in the pitch black of a bathroom and drink from it. As soon as she drank it, she screamed. It was, he said, a self-destructive act or one of serious self-harm. He also questioned why the trip to Pakistan did not involve marriage if her father only bought a one-way ticket for his daughter.

Shafilea was taken to Warrington hospital for emergency treatment when she returned home in May 2003.

A patient who asked her why she had drunk bleach was told: "You don't know what they did to me there."

Edis said Shafilea told the patient her parents had accepted a formal offer of marriage from her cousin and "that is why she drank the bleach". Edis said: "She didn't even like the guy, she wanted to get out of there but they had taken away her passport."

On Monday,, poems written by Shafilea were read to the jurors. One was called Happy Families and the other I Feel Trapped, in which she expressed her frustration about her family's concerns over honour and said she felt trapped. "I don't pretend like we're the perfect family no more," one of the poems said. "All they think about is honour."

She was murdered, Edis said, because she failed to conform to her parents' wishes and they embarked upon a campaign of domestic abuse after she allegedly "brought shame" on the family.

Shafilea's remains were identified by DNA and she was wearing westernised clothing – white stilettos – and her hair had been dyed red. By her clothing, the prosecution said, she was "seeking to demonstrate something of her independence and freedom".

She was described as a Westernised young British girl of Pakistani origin at the beginning of the murder trial.

The prosecution said her parents had standards that she was "reluctant to follow". In particular, like most 16- or 17-year-old girls she wanted boyfriends, which caused intense pressure on the family. Her parents controlled her so she did not have freedom of movement, Edis said. She ran away briefly from home in 2002 and early 2003.

In February 2003, shortly before the trip to Pakistan, Shafilea was "recaptured or abducted" by her father outside the gates at Great Sankey high school in Warrington, where she was a pupil. She was forced into the car after she had run away.

In the year before she died, the prosecution said, her parents "embarked on a campaign of domestic violence and abuse directed at her and designed to force her to conform so that she behaved in a way that was expected.

"The defendants had spent the best part of 12 months trying to crush her will, realised they were not going to succeed and finally killed her because she had dishonoured the family and brought shame on them."

Edis said Shafilea went missing on 11 September 2003, but it was not reported to police until a week later. "Not by a member of her family, but by a teacher."

The prosecution alleges she was murdered by her parents at the family home on the night of 11 September.

Edis said arranged marriages were acceptable in many communities, but forced marriage was different. The defendants wanted an arranged marriage for their daughter but "in the end it was going to require compulsion because she didn't want to do it".

Shafilea had been "appalled" by the prospect of an arranged marriage in rural Pakistan. When she returned to the UK, she was taken to hospital as an emergency case and needed regular treatment.

He said no one else had caused Shafilea distress "apart from her parents". The prosecution claims they withdrew money from her bank account that she had saved from a part-time job.

Edis questioned the couple's behaviour following Shafilea's disappearance, not reporting it to police or attempting to find her. Iftikhar switched off his mobile phone and there were no calls made from the landline to try to find her, unlike two previous occasions when she was missing and they repeatedly phoned her.

The Ahmeds put their house on the market within two days. Iftikhar told a potential buyer they were moving to Lancashire "because the daughter had brought shame on the family", Edis said. He added it was a surprising observation to make "if she had simply run away from home".

The police were told of a potential sighting at a chemist's in Glasgow in November 2003 following public appeals. The couple were shown CCTV footage and said they were 90% certain it was Shafilea, whereas her teacher said it was definitely not.

Months later when the body was identified, the Ahmeds issued a brief statement talking of their beautiful and irreplaceable daughter, which contrasts with their conduct in the previous September, when the prosecution say "they did nothing at all" after her disappearance.

Edis told the jury that Shafilea's father had been married to a Scandinavian woman, Vivi Anderson, whom he had a son Tony with. In 1986 he married Farzana in Pakistan because Iftikhar "felt the pull of his family" and loyalty. When his uncle told him that it was time to marry Farzana, he complied.

Alesha Ahmed is expected to give evidence on Tuesday.

The case continues.