O’Leary cites the time he dug his heels in when former chairman Ridsdale wanted to match Chelsea’s offer of £11m for Frank Lampard.
But he refused to increase Leeds’ £7m bid — which was his own valuation of the England midfielder.
O’Leary, now boss at Aston Villa, said to The Sun: “We got to the semi-finals of the Champions League and I remember a cheque coming in for just under £20m.
“It was a fantastic amount of money. I rated Lampard and fancied buying him from West Ham for a certain price.
“Chelsea bought him for £11m and I valued him at £7m. There was no way I was going to £11m. But the chairman said to me: ‘You have all this money — you should go out and buy players’.
During his four years at Leeds, O’Leary spent £84.75m, recouping £31m.O’Leary added: “I told Ridsdale we had not got a bad team if we didn’t buy anyone else that summer. I was not going to spend for the sake of it.”