The man, who the Mirror exclusively interviewed, told how Christian Brueckner confessed his bizarre plans.
This week police dug up an allotment near the Braunschweig, Hanover home of Bruckner, a convicted child abuser.
His friend, who The Mirror has agreed not to name, said the 43-year-old had two homes near Hanover – a kiosk he ran which had living quarters and a “shed with a bed” attached to an allotment.
That property had a makeshift cellar, which he compared to that owned by Josef Fritzl.
The Austrian man raped his daughter who he held captive in a cellar and had seven children with.
The former friend told how Brueckner once talked to him about a bizarre plan he had for the ‘cellar’ at his allotment home.
He said: “There was a hole in the floor inside the allotment house and one day he told me he wanted to put a see-through perspex glass over it.
“I said to him ‘what the hell for? Just so you can look down into a dirty old cellar?’
“Now I think maybe he wanted to build a Fritzl cellar like the guy in Austria who kept his daughter down there.”
He added: “I knew he had criminal activities. He wanted to take me with him to steal some diesel. But I didn’t know anything about children.”
The man, who last saw the suspect four years ago, added: “He was a good friend, but I feel disgusted by him now.”
Brueckner was also on the end of another stinging character witness from a former friend.
Michael Taschl, who lived with the German paedophile in Praia da Luz, where Madeleine vanished, told The Mirror: “He was a pervert and more than capable of snatching a child for sexual kicks or money.”
Mr Tatschl claimed that Brueckner also boasted about “selling kids” – although there as been no evidence found of this so far – and he fears Madeleine was sold to a sex ring.
He claimed: “He was always bragging about money and making money. He even talked about selling kids, maybe to Morocco.
“I think he probably sold Maddie to someone. Maybe a sex ring. I was living with him at the time. He was my best friend. I know he did it.”
Mr Tatschl claimed that Brueckner was obsessed with the dark web and suspects he used it to deal in pornography and drugs.
He also claimed Brueckner had a secret spot in his home in Praia da Luz where he kept stolen loot.
Madeleine McCann investigators have refused to say what they found in the ‘secret cellar’ they discovered yesterday.
The site, on the outskirts of Hanover, Germany, is four miles from Brueckner’s former addresses in the Linden area of the city and backs onto a canal.
Mini-diggers and forensic specialists with sniffer dogs were seen in the garden and authorities were using large earth-moving machinery to dig up the entire backyard, according to local news reports.
Crime profiler and intelligence analyst Mark T. Hofmann has said police may not be solely focused on searching for a body.
He said the police are likely looking for any form of ‘data carrier’ – such as USB sticks, external hard drives or mobile phones.