A woman who allegedly allowed the female genital mutilation of a seven-year-old girl to take place in her house has admitted in court she helped hatch a plan to lie about it to “save my skin”.

The woman, known as A3, allegedly helped facilitate the FGM of a girl known as C1 when she was seven years old, between 2010 and 2011.

She gave evidence at the first trial to prosecute FGM in Australia on Tuesday. The girl’s mother, known as A2, is standing trial along with a woman known as KM who is accused of carrying out the FGM on C1 and her younger sister C2, when they were each seven years old.

The alleged FGM took place in a “khatna” ceremony each girl underwent after they turned seven. C1’s alleged FGM took place at A3’s home in Wollongong, south of Sydney.

The supreme court was played a phone conversation between A3 and the girls’ mother in 2012 after the girls had been questioned by police. The pair hatched what is being referred to in court as “the Africa story”.

“We just said no, they haven’t got that [FGM] performed, we said that [KM] has just done the check only, if it would have happened then it would have happened in Africa and we don’t have information about that,” the girls’ mother said in the conversation.

The pair planned to tell police the girls had just undergone a “check-up” as part of the khatna ceremony and if the girls did have FGM then it had happened in Africa.

Crown prosecutor Nanette Williams put it to A3 that she had “agreed to become part of a lie”.

“It was a lie … everyone tries to save their skin. Everyone was in a panic, but in the end I told the truth,” she responded.

A3, a senior woman in the Dawoodi Bohra Shia Muslim community, has told the court she agreed to let the khatna ceremony happen in her home but she was only in the room with C1 for “two minutes” before she left because she was more concerned with the food she was going to serve her guests.

The court has heard the khatna ceremony for young girls is a type of coming-of-age ceremony involving prayers and the cutting of the clitoris.

A3 says she does not know what is involved in khatna.

“I have no children, I am not interested, I don’t try to find out about it,” she said.

In a phone call played to the court, A2 rang A3 straight after the girls had been medically examined and told her the doctor could not confirm the girls had their clitorises cut.

“I believe that it is not visible, they couldn’t even see it, however I think that matter is not going to finish here,” the mother told A3.

A3 was angry during the phone call and suggested they should mount a counter case against the police.

Asked in court if she was angry because she though she was going to be charged in relation to FGM, A3 responded: “it was affecting the children, that’s why I was angry”.

In another phone call played to the court, A3 talked to the girls’ mother about genital piercing.

“I was talking with [name withheld] about how funny it is, look at body piercing where it is,” she said, to which the girls’ mother responded: “ha ha, that no problem”.

“No problem about it, ridiculous laws they have,” A3 said.

When asked if she was referring to FGM laws and people being allowed to pierce their genitalia, A3 said she was just talking about laws and it was not because she believed in anything in particular.

Asked if she thought the FGM laws in NSW were ridiculous because she wanted the tradition to be continued, A3 responded “no, no”.

A3 was initially arrested and charged by police, but charges have since been dropped.

The grandmother of the girls, known as A5, was accused of lying to the court on Monday when she said she was not aware khatna happened in Australia until the ceremonies of her granddaughters.

She was present at the khatna of each girl, which took place between 2010 and 2012, but said she was too busy praying and did not watch what happened to them.

Each girl has previously told the court they were laid on a bed with nothing covering their genitals during the ceremonies.

C1 has described imagining she was a princess in a garden while the alleged FGM was taking place and C2 described “feeling hurting” in her “bottom” during it.

Medical evidence as to whether FGM has been carried out on the pair has been inconclusive.

The trial continues.