Child killer nurse Lucy Letby allegedly told a consultant in a "bizarre" meeting that she was coming back to the neonatal unit if they like it or not.
The 34-year-old former nurse is serving a whole life prison sentence after she was convicted of seven murders and seven attempted murders against babies in her care at the Countess of Chester hospital.
Dr Ravi Jayaram said the comment was made in late March 2017, just days before he understood that hospital bosses had planned to return her to the unit under supervision, an inquiry heard.
Letby was redeployed to clerical duties in July 2016 after all seven consultant paediatricians told executives she may be deliberately harming babies after a series of sudden and unexplained deaths and collapses on the unit.
The Thirlwall Inquiry into the events surrounding Letby's crimes has heard Letby launched a grievance procedure against her job move.
A hearing later detailed allegations that junior doctors had made reference to an unnamed nurse on the unit as an "angel of death" and that babies were being killed.
Hospital bosses then called consultants to a meeting in January 2017 which became "very odd" when chief executive Tony Chambers told them they had to apologise to Letby and her family, said Dr Jayaram.
Giving evidence on Wednesday, he said: "He started relating to us how they have evidence from the grievance procedure we had treated Lucy Letby very badly and how she could have good grounds to report us to the GMC (General Medical Council) for some of our behaviour.
"We were told that she is coming back and we will have to work with her, and that some of you will have to undergo mediation.
"Tony Chambers said 'I'm drawing a line under it, you will draw a line under it and if you cross that line there will be consequences'.
"We were all just absolutely blindsided by this."
Dr Jayaram referred to Karen Rees, head of nursing in urgent care, who read out a statement from Letby.
He said: "It was very assertive. I remember the tone of it being almost triumphant.
"It struck me that the meeting had probably been choreographed in some way."
Counsel to the inquiry Rachel Langdale KC asked: "Did you know what you were supposed to be apologising for?"
Dr Jayaram said: "No we didn't, apart from our 'bad behaviour' but we didn't know what that was."
He said he eventually agreed to sign a joint letter of apology from the consultants, although it stated none of them had made any inappropriate comments themselves.
Dr Jayaram said he spoke to then HR director Sue Hodkinson about his "discomfort" about taking part in a mediation session with Letby.
He said: "I had no understanding how mediation worked. In retrospect it was an entirely inappropriate line to go down because mediation is when issues are resolved and it's just for clearing the air so people can work with each other."
He said that "on balance" he felt he probably ought to engage in the face-to-face meeting with Letby and an independent mediator.
Dr Jayaram said: "I was asked to read a statement to Letby. I wrote something along the lines of the apology.
"She told me that she had evidence from her grievance that myself and (fellow consultant) Dr Stephen Brearey had orchestrated a campaign to have her removed and that I and Dr Brearey had given an ultimatum to the trust that if she was not suspended we would call the police.
"She said she was coming back next week whether I liked it or not and would I be happy working with her. It was a bizarre meeting."
He said he was "angry" when he left the meeting because he thought "everyone was being misled", including Letby, as he told the inquiry he had neither staged a campaign to move her out of the unit or issued any ultimatum.
Letby never returned to the unit as hospital bosses eventually called in Cheshire Police to investigate in May 2017.
Letby, 34, from Hereford, is serving 15 whole-life orders after she was convicted at Manchester Crown Court of murdering seven infants and attempting to murder seven others, with two attempts on one of her victims, between June 2015 and June 2016.
The inquiry, sitting at Liverpool Town Hall, is expected to sit until early 2025, with findings published by late autumn of that year.
