Vusimuzi "Cat" Matlala rejected a 12-year prison sentence and walked away from his plea deal with the state on Monday

The state's bid to secure a conviction and insider testimony in the R228 million police tender corruption case has suffered a major setback after Vusimuzi "Cat" Matlala abandoned his plea agreement and opted to fight the charges instead.

The dramatic development means prosecutors will now have to rebuild their case in open court, while the agreement that would have seen Matlala testify against senior police officers implicated in the tender scandal has fallen away.

Matlala appeared before magistrate Ignatius du Preez in the Pretoria Specialised Commercial Crimes Court on Monday, where his legal team confirmed that he would not accept the court's proposed 12-year prison sentence.

"I've been informed by counsel on your behalf, in respect of yourself, accused two and three, that it is your choice to withdraw from the plea and sentence agreement as you decline to accept the court's recommended sentence," Du Preez said.