A JURY has heard allegations that police watched a woman deal in heroin in broad daylight on a York city centre street.

PC Joanne Wragg told York Crown Court that she saw Michelle Joanne Sharpe, 34, exchange something with a male cyclist and then put something in her back pocket, shortly before noon in Piccadilly.

David Brooke, opening the prosecution, alleged that as police closed in moments later, Sharpe threw away eight wraps of heroin and that she had £640 on her.

Sharpe, formerly of George Street, Walmgate, denies possessing heroin with intent to supply it to others.

PC Wragg said she saw Sharpe and the cyclist through binoculars, standing next to a wall, with their backs to the street.

"There was some sort of, what appeared to be some sort of transaction, and I saw the defendant put something in the back pocket of her trousers," she said.

Two other people were near the couple by the wall. Then police in vehicles and on foot appeared.

"As the officers approached the defendant, I saw her throw something small and orange into the bushes of the raised flower bed," PC Wragg said.

Mr Brooke claimed that another officer found a plastic capsule in the bushes. It contained 1.75g of heroin.

All four people were stopped, and officers found £88.50 in Sharpe's back pocket in notes and coins, and £553, mostly in notes, inside a closed umbrella in her rucksack. They found no drugs on the other three people. Sharpe later told police she was a heroin addict who lived on benefits. The £640 was partly two weeks' benefit and partly money which her boyfriend had withdrawn from his mother's bank account.

She denied she had been taking part in a drugs transaction. The trial continues.

Updated: 10:53 Tuesday, July 08, 2003