Kathleen Thompson, 47, was shot dead outside her home in Creggan in November 1971.
The former Royal Green Jackets Regiment sergeant was responding to evidence that a platoon commander had given the order.
“I never heard that anytime,” he said.
A solicitor for the Thompson family said another soldier has told the inquest the order was given by Lt David Travers, now deceased.
“I don’t think he would have given that order to anyone,” the former sergeant said.
The witness, who was based in the region at the time, described his former superior as “very genuine” and “straight as a die”.
An inquest in 1972 into Mrs Thompson’s death returned an open verdict.
The then Attorney General John Larkin QC ordered a new inquest in 2013.
It began in 2018 but it was adjourned to allow time to trace three soldiers and resumed on Monday.
During the first phase of the new inquest, three years ago, one former soldier said he had to face the possibility that a bullet from his weapon killed Mrs Thompson.
At the resumption of the inquest on Monday, counsel for the coroner said the circumstances of Kathleen Thompson’s death were a “cause for concern for her family and the general public”.Tags: