Harry Redknapp, the Tottenham Hotspur manager, opened an offshore bank account in Monaco to hide "bungs" totalling £189,000 when employed by Portsmouth football club, a court was told on the opening day of his trial into alleged tax evasion.

The bank account in question was allegedly called "Rosie47" and the court was told that the name referred to that of Redknapp's dog and the year of his birth.

Redknapp, 64, denies the charge alongside co-defendant Milan Mandaric, the former Portsmouth chairman.

John Black QC, for the prosecution, told Southwark crown court, in south London, that Redknapp and Mandaric, 74, "must have known" they were avoiding taxes.

"These payments were a bung or offshore bonus that the parties had absolutely no intention of paying taxes for," he said. "The crown's case is that the money transferred to that offshore Monaco account was deliberately and dishonestly paid by Mr Mandaric and was deliberately and dishonestly received by Mr Redknapp with the intention of concealing them from the UK tax authority.

The prosecution alleges both these defendants are guilty of cheating the public revenue."

The case, which is scheduled to run for two weeks, could have an effect on the England football team as Redknapp is widely viewed as the favourite to replace Fabio Capello as manager following the European Championships this summer.

The charges relate to the transfer of Peter Crouch from Portsmouth to Aston Villa on 27 March 2002 for £4.5m and the transfer bonus Redknapp received from the club for the sale under the terms of his contract.

Crouch had been bought from Queens Park Rangers in 2001 for £1.25m but stayed at Portsmouth for nine months before being sold a few days after Redknapp had changed jobs from director of football at Portsmouth to manager.

Redknapp had a "number of contractual bonuses" including a "transfer bonus" based on "net increase" of a player's valuation, Black said.

Redknapp joined Portsmouth as director of football in summer 2001 when, it was alleged, his contract allowed him to receive 10% of the net profit from the sale of any player from Portsmouth. These terms changed to 5% when he became the manager of the club on 18 March.

At the time of the sale of Crouch to Villa, the crown alleged that Redknapp's player transfer bonus would be 5% of the sales, or £115,473. Black said it "doesn't take a mathematician to see" a greater bonus would have been due to Redknapp if the transfer had occurred under the 10% terms.

A bespectacled Redknapp sat alongside Mandaric for most of the proceedings in the glass-walled dock of court six, occasionally reading from notes as Black outlined in full the two charges against him and his co-defendant.

Redknapp was supported in court by executives from Tottenham, his son Jamie, a former Liverpool and Spurs player, and by Richard Bevan, chief executive of the League Managers Association.

The first charge alleges that between 1 April 2002 and 28 November 2007 Mandaric paid $145,000 (£93,100) into an account in Monaco named "Rosie47" to avoid paying tax and national insurance. The second count alleged that $150,00 was paid by Mandaric into the same account between 1 May 2004 and 28 November 2007.

After Redknapp had asked for £100,000 to be moved to the accounts of First Star International Limited, a company set up by Mandaric in California in 1998 and based in Miami, he later closed the Rosie47 account in February 2008, the crown stated. Redknapp requested that all monies in that account the be transferred to his London HSBC account.

The court heard how Redknapp flew to Monaco in April 2002 to open the account, also with HSBC. Black said: "He flew to Monaco for the specific purpose of setting up a secret account, into which the off-the-record payments could be received."

It was four years before the account became known to the police and tax authorities. Previously, Redknapp had never mentioned the Monaco account when he was investigated by HM Revenue and Customs over his transfer dealings at West Ham – an investigation that included the sale of the former England captain Rio Ferdinand to Leeds United for £18m on 22 November 2000.

That investigation, between January 2004 and October 2006, "was originally prompted by concerns over a £300,000 payment ... regarding profit made in a player transfer, namely Rio Ferdinand," Black said.

The Rosie47 account was only revealed during an inquiry into illicit payments in football, led by the former Metropolitan police commissioner Lord Stevens. The results of the investigation were handed to the Premier League chief executive, Richard Scudamore, in July 2007 after Redknapp had been interviewed the previous November as part of the investigation.

"That was the first time anyone heard of a Monaco bank account. It's significant ... that the bank account opened by Mr Redknapp was located in an offshore tax haven. The crown suggests this was quite deliberate and was intended to obscure and to render less transparent the nature of the money payments," Black said.

Black added that Redknapp wanted payments promptly transferred in to the "tax haven".

"The crown say that Redknapp did not wait long before taking steps to ensure that he would receive what he regarded as his due off the record payment."

At the start of the proceedings Judge Anthony Leonard informed jurors to "leave prejudice or favour behind" as a panel of eight men and four women were sworn in. "The defendants are two well-known personalities within the world of football."

Leonard said that football can "almost overwhelms other aspects in life" when ordering jurors to focus only on the charges before them. "It can prejudice if you hold such allegiances or prejudices towards clubs that the defendants were or are presently involved with."

Jurors were also told to inform the judge if they had listened to an episode of TalkSport radio on 17 November last year. "This case will attract publicity," he added. "My advice is that you must not read or listen to these reports."

Redknapp managed Portsmouth between 2002 and 2004, and returned to Fratton Park in 2005 after a brief spell at Southampton before moving to Tottenham in 2008. This season, Spurs are challenging to win a first league championship for the first time since 1961, currently standing eight points behind Manchester City, the leaders. The case continues.