Biti’s statement, made in an interview with The Standard last week, has set him on a collision course with Mines and Mining Development minister Obert Mpofu who claims the MDC-T secretary general is not telling the truth.
Mugabe told Zimbabweans in Ethiopia last week that Mpofu told him that a third diamond auction had been done and proceeds would be used to raise civil servants’ salaries.
Government had told its restive employees that it did not have money to improve their salaries despite threats of a crippling strike.
Biti said although diamonds were being sold, treasury was not getting the cash.
“There is no money from the sale of diamonds,” he said.
“Diamonds are being sold but there is no accountability. We are not getting anything.”
Biti however could not say where the money was going.
But Mpofu shot back saying he had a written letter from Biti acknowledging receipt of the undisclosed sums of money to be used in paying civil servants’ salaries.
“I have a written letter from Biti saying he had received the money,” said Mpofu who is a fierce Mugabe loyalist.
“If he is telling you that he didn’t receive the money, I don’t know why he said so because I have the letter he sent me.
“I even received the letter yesterday (Thursday).
“I am finding it hard to believe that Biti said that because I have an official correspondence with me from him.
“The president said more money is coming to beef up salaries for civil servants.”
However, Mpofu refused to show this newspaper the supposed letter.
Biti could not be reached for comment on Mpofu’s allegations as his office on Friday said he had left the country for South Africa.
Mugabe said the 236 000 state employees were not being paid a fair wage as they earned less than his farm workers who earned US$350 a month.
Civil servants earn an average of US$200 a month but statistics show that a family of five needs at least US$502 a month to survive in Zimbabwe.
Mugabe had said the money would come from Mbada, a South African company that entered a joint venture with the Zimbabwe Mining Development Corporation to mine diamonds in the Marange district.