NEW YORK (Reuters) - The former head of ailing US insurance giant AIG told a court that he had a private jet fly a large block of the company's stock to Bermuda from New York to prevent AIG from seizing it.

"It was a reaction to the entire environment that was emerging between AIG and Starr International," Maurice (Hank) Greenberg told US District Judge Jed Rakoff. "It was starting to get very ugly."

A key witness in the dispute between Starr International and American International Group, Greenberg appeared peevish under questioning by the lawyer for his former company, Ted Wells.

Greenberg also admitted to being "angry" at suddenly losing his job at the company that he had built into the world's largest insurer.

"Yes. It was sudden and abrupt....Yes I was angry," he told Wells when asked about his ouster.

AIG is suing Starr International for $4.3 billion in damages representing the sale of millions of AIG shares since Greenberg left the insurer and the return of more than 185 million AIG shares that Starr International controls.

AIG accuses Greenberg, chairman of the privately held, Bermuda-based Starr, of illegally taking the stock, worth at one point at least $20 billion, in 2005.

AIG contends the shares were pledged to fund a deferred compensation plan for selected employees. Starr disputes that saying the beneficiary of the shares was always a charitable trust.

Wells told Judge Rakoff that a private jet was flown from Bermuda to New York in late September 2005 so that Starr representatives, accompanied by bodyguards, could transfer the shares to accounts in Bermuda.

"If they attached (or seized the stock by court order) we would be spending our time in additional lawsuits," Greenberg said.

Greenberg said his lawyers advised him to move the stock, and it was not in response to AIG's lawsuit seeking to wrest back the AIG shares from Starr International.

The 84-year-old Greenberg built AIG over 38 years into the world's largest insurer. But in 2005, he was ousted amid investigations into accounting irregularities.

Until the US government's $180 billion bailout of AIG, Starr was the insurer's largest shareholder. For some 35 years Starr had funded a deferred compensation scheme for select employees with its AIG stock making "many, many millionaires", Greenberg said. Judge Rakoff ruled on Monday that investigations surrounding Greenberg's ouster, the US government's bailout and controversial bonuses to AIG executives could not be brought up at the trial, saying the matters were irrelevant to the case at hand.