Soham accused Ian Huntley waited eight hours before telling police he had seen Holly Wells and Jessica Chapman on the night they vanished, his Old Bailey murder trial heard today.
Huntley (29) said he had not thought it was "necessary" to tell police scouring Cambridgeshire for the 10-year-olds that he had seen them walking past his house, the court was told.
He reported the sighting in the early hours of Monday August 5, some eight hours after they went missing, after a massive hunt had been launched.
And he had earlier denied seeing two girls, when he was asked by a group of searchers at 10.30 p.m. on Sunday. The court heard that the Soham Village College caretaker was "incredibly helpful" to police in the search for the missing girls.
But he told a dog handler that he did not have the keys to the hangar building, where the charred remnants of the girls' clothing were found hidden in a bin some 12 days later.
The keys to the building were later found on top of a chest of drawers in his home, marked with a green key fob with the word "hangar" written on it, the court has heard.
The drama of the hunt was relived in the historic courtroom number one, as witnesses described the mounting panic and the sight of Kevin Wells screaming his daughter's name across playing fields on the foggy night.
But Huntley seemed "calm" and "as if he was out walking his dog" during the frantic hunt, according to a fellow searcher. Two retained firemen said Huntley had told them he had seen the youngsters between 6 and 6.30pm.
He made the admission while the men were out searching for the girls, sometime after 2am. Mr Stephen Coward QC, for Huntley, suggested the caretaker's memory might have been triggered by one of the searchers mentioning that the missing girls were wearing red Manchester United shirts.
It was not clear if he knew that earlier, when he had denied seeing two girls. Ms Susan Hurrell, a teacher at the girls' primary school, said Huntley told her about the sighting at about 2.30 a.m., and that he seemed "reluctant" to talk to police about it.
He told her the sighting was at about 5.50 p.m., she said. She pointed him out to Sgt Nelson, who said she had noticed the same man hanging around her police rendezvous point earlier.
"He smelt as if he was freshly bathed, you could smell soap or aftershave," she said. "Everybody else, myself included, was rather bedraggled and stale." Sgt Nelson called him over and said he told her he saw the girls at 5.30 p.m., when they asked about his girlfriend Ms Maxine Carr.