"If I don't talk to him immediately, this is over. I'm tired of living a lie. I'm going to go public," Hunter said, according to Young.
Edwards indicated that Hunter needed to be kept on an allowance, said Young.
"$5,000 a month was the typical amount, but there were a couple of times where we gave $12,000 a month," said Young.
According to Young, Edwards tried to distance himself from the Mellon money of which he was aware while he was interested in becoming U.S. attorney general in a new Democratic administration.
"He said he couldn't know about any of this in case he had to be sworn in for attorney general," Young said.
Young is the author of "The Politician: An Insider's Account of John Edwards's Pursuit of the Presidency and the Scandal That Brought Him Down," in which he accuses Edwards of using money from his benefactors to maintain his relationship with Hunter.
The defense argues that the money Edwards received from Mellon and Baron was for personal reasons: to protect Edwards' wife, Elizabeth, who was dying of cancer, and his family from public humiliation. Edwards has said his actions were wrong but insisted that they were not illegal.
"This was a fall from grace," defense attorney Allison Van Laningham told jurors. "It was that humiliation he was trying to avoid all along."
Edwards could face up to 30 years in prison if convicted of all six felony and misdemeanor counts against him. Seven of the 16 jurors, four of whom are alternates, are women.
Edwards' lawyers wasted no time attacking Young's credibility, starting with their opening statements Monday. Van Laningham alleged that Young consulted with three other witnesses about testimony after the witness list was released three weeks ago and portrayed him as a greedy staffer who has said Edwards is his ticket to the top.
Van Laningham also pointed out that Young had his own affair, a one-night stand with a campaign employee.
Experts say the government faces an uphill battle to convict Edwards in a legal field riddled with loopholes. The former senator refused a plea bargain that would have given him a few months in prison but would have allowed him to keep his law license.
His wife, Elizabeth, died of cancer in December 2010. The pair had separated after Edwards acknowledged the paternity of Hunter's child, but Edwards was at her bedside when she died.
Jurors also heard voice mails of calls between Edwards and Young.
In one excerpt, the candidate tells Young he should tell his wife about the situation.
And a January 2008 call by Edwards made a reference to Hunter, according to Young:
"Just wanted for all of you, including her, to know that I'm thinking about you."