The McCanns' pain over the disappearance of their daughter was "multiplied 100 times" by a book by a former Portuguese police chief, a court has heard.
Gerry McCann's sister Trish Cameron said he and wife Kate had been left in "purgatory" by the disappearance of Madeleine and claims that they were somehow involved.
Speaking at the libel trial of former police chief Goncalo Amaral, Mrs Cameron said the publication of his book in 2008 and a TV documentary based on it the following year caused the family to be "vilified" and "demonised".
And she said Madeleine's twin siblings Sean and Amelie, now eight, were aware of them by comments made by fellow pupils at their school.
"My brother and sister-in-law live in purgatory because they have no end and they are looking for the truth," she told the court.
"They would like an end but there is no end because they don't know what's happened."
The McCanns say the former detective's claims in the book The Truth Of The Lie, including suggestions that they hid their daughter's body after she died in an accident and faked an abduction, damaged the hunt for Madeleine and exacerbated their anguish.
If successful the family stands to gain around £1 million in damages.
Mrs Cameron, whose voice cracked as she gave evidence, said: "They were vilified in this book so their distress was multiplied 100 times.
"This pain was felt by all of their family because we still have a missing child and we knew that what is in there is not true."
The nurse, from Glasgow, travelled to Lisbon with brother Gerry, who has applied to give evidence in the case.
No decision was made today and other legal teams are thought to have until October 16 to give their views before the judge's decision.
As Mr McCann left court at lunchtime, he said: "Obviously it's disappointing, but we will just keep going."
Mrs Cameron told the court that she travelled to Portugal after her brother told her about Madeleine's disappearance in May 2007, spending three months there with him and Kate, and later continuing to help them as they struggled to cope.
She described how her brother called her in a "cry for help" when Mr Amaral's book was published.
She described how a family "rota" to help the couple when they first returned from Portugal had to be reinstated in the aftermath of the publication in July 2008.
"Kate was in a very low mood, she was not coping with daily things," she said.
"She was doing solitary things, almost like torturing herself, out running long, long distances by herself.
"She was going to church and praying on a daily basis, and she was sleeping for a long time too.
"She wouldn't go out socially at all, she would not go to a shop.
"We had to help with practical things like the shopping and cooking and looking after the children to help her."
The effects of the book were worse than when the McCanns were made arguidos, or formal suspects, she said.
"This was a different thing. It was much more conclusive and demonising them, dehumanising them, saying they did not care for their children, that they were responsible.
"It makes it out that they weren't truthful and they have been vilified and it's very hard to turn round opinion about them that has been so widely spread."
She told the court the Portuguese people had "turned against" the McCanns, saying Mr McCann had been jeered at in the street when he returned to Portugal in April 2009, and was advised to hire security.
"This (the book) perhaps gave people a conclusion, but it's not the right conclusion, it's all lies," she said.
She said the couple had only started to socialise again in the last year or two but are more comfortable in people's houses "where they are not being watched or scrutinised".
And asked if twins Sean and Amelie knew about the book and the TV programme, she said: "Last week Amelie came in from school and said some people had been talking about it.
"She said that people were talking about them at school, and that it was not all good things that had been said.
"In the past Sean has come in and said to Gerry, 'daddy are you famous?' .
"Gerry said, 'why are you asking that?', and he said because a boy at school had seen him on the television.
"Gerry continued doing what he was doing and said, 'no I'm not famous, it's because your sister is missing'."
Kate McCann's mother Susan Healy, who also travelled to the court, was expected to give evidence today but it emerged that the McCanns' lawyer Isabel Duarte had previously dismissed all of her English-speaking witnesses other than Mrs Cameron, but forgotten the request amidst the confusion of the case.
Madeleine, who was then nearly four, disappeared from her family's holiday apartment in Praia da Luz in the Algarve on May 3 2007 as her parents dined at a nearby restaurant with friends.
Mr Amaral, who initially led the inquiry into her disappearance, was removed from the Portuguese investigation in October 2007 after criticising the British police.
He has also applied to give evidence at the trial.
Under cross-examination from the former police chief's lawyer Vitor Oliveira, Mrs Cameron was asked if she was aware of a petition, signed by 17,000 people in England, in January 2008 calling for social services to investigate the McCanns for leaving their children alone.
"I had heard of it, yes," she said. "They were not happy about it and they took action to counteract it."
Mr Oliveira also asked if she was aware that 70% of British people in August 2007 condemned the couple for having left the children alone on the night Madeleine disappeared, to which she replied: "No I did not know that."
The case, at the Palace of Justice in Lisbon, was adjourned to next Tuesday after hearing evidence from Eduardo Damaso, deputy editor of Portuguese tabloid Correio da Manha.
It is expected to finish hearing evidence in November.
British detectives launched a fresh investigation into the youngster's disappearance in July this year - two years into a review of the case - and believe she could still be alive.
The Portuguese investigation into Madeleine's disappearance is officially closed.