Donald Trump’s ex-lawyer and friend-turned-foe Michael Cohen has given testimony against his old boss during a civil fraud case against the former president.

Cohen and Trump came face to face for the first time in five years in a New York courtroom on Wednesday morning (AEDT).

Trump’s former fixer is now a key witness in a case brought by Democratic New York Attorney General Letitia James alleging Trump inflated the value of his family companies’ properties.

As he took to the stand, Cohen told the court he and former Trump Organisation CFO Allen Weisselberg would “reverse engineer” the value of Trump’s assets to suit whatever number Trump wanted.

“I was tasked by Mr Trump to increase the total assets based upon a number that he arbitrarily elected…to reverse engineer the various different assets classes, increase those assets in order to achieve the number that Mr Trump had tasked us,” he said.

Cohen said the value of the assets would be “whatever number Mr Trump told us to”.

The case threatens to break up Trump’s business empire.

Trump has denied wrongdoing and defended the valuations of his properties.

After the trial broke, Trump told reporters he was “not worried at all” about Cohen’s testimony.

Colleen Faherty, a lawyer for the attorney general’s office, began her questioning of Cohen by reviewing his criminal history.

Cohen in 2018 pleaded guilty to a campaign finance violation and lying to Congress during a separate probe of Trump’s business dealings in Russia.

“I did that at the direction of, in concert with and for the benefit of Donald Trump,” Cohen said on the stand, referring to his false testimony to Congress.

Trump leaned back in his chair with his arms folded and intently watched Cohen on the stand, occasionally whispering to his lawyers.

Faherty’s early questioning appeared geared toward heading off attacks by Trump’s lawyers on Cohen’s credibility.

Earlier on Tuesday (local time), Trump, the frontrunner for the 2024 Republican presidential nomination, called Cohen a “liar”.

“He’s a proven liar, as you know, a felon,” Trump told reporters before entering the courtroom, referring to Cohen.

“We did nothing wrong and that’s the truth.”

Cohen, who once said he would “take a bullet” for Trump, began a three-year prison sentence in 2019 but was released to home confinement the following year during the coronavirus pandemic.

Michael Cohen cut ties with Donald Trump five years ago and is now a key witness. Photo: Getty

Cohen’s testimony during a 2019 Congressional probe of Trump’s finances was the impetus for James’ lawsuit.

Trump has denied wrongdoing and defended the valuations of his properties, saying the case is a “fraud” and a political witch hunt.

He has occasionally appeared in court over the past month, complaining in remarks to reporters that it is a distraction from his campaign.

He arrived on Monday following a campaign stop in New Hampshire and just days after being fined $US5000 ($7900) by Justice Arthur Engoron, the judge overseeing the case, for violating a gag order.

In September before the trial began, Engoron found that Trump fraudulently inflated his net worth and ordered the dissolution of companies that control crown jewels of his real estate portfolio, including Trump Tower in Manhattan.

That ruling is on hold while Trump appeals.

The trial largely concerns damages.

James is seeking at least $US250 million in fines, a permanent ban against Trump and his sons Donald Jr and Eric from running businesses in New York and a five-year commercial real estate ban against Trump and the Trump Organization.

Early in the trial, Engoron barred the parties from speaking publicly about court staff after Trump shared a social media post attacking Engoron’s clerk and identifying her by name.

Trump deleted the post but last week Engoron revealed that a screenshot had remained live on his campaign website for weeks.

Engoron, who said the lapse appeared to be “inadvertent,” fined Trump $US5000 and warned that future violations would bring “far more severe” sanctions including imprisonment.

-with AAP