The manoeuvre caused the infant's body to become detached from the head. Two other doctors subsequently carried out a c-section to remove the infant's head and it was "re-attached" so that the mother could say goodbye.
At the Medical Practitioners Tribunal Service in Manchester, Dr Laxman wept as she relived the procedure at Ninewells Hospital in Dundee, in March, 2014. She told the hearing she believed the baby would have died had a C-section been carried out.
She added: "I was trying to deliver a live baby, I was trying really hard, possibly too hard. I did not intend to harm mum or the baby. I am distraught at the outcome and I am very sorry it did not come out the way I meant it."
The mother's waters had broken early at 25 weeks and her baby was found to have a prolapsed cord and was in a breech position, while the cervix was around 4cm dilated. It can be 10cm when fully dilated.
Dr Laxman, who denies misconduct, had started work at 8.30am the previous day and went home at 6pm for five hours before returning to the hospital at 11pm.
She was told about the patient at 2am and subsequently paged at 8.30am when her condition became more critical.
She told the tribunal: "I thought with a C-section we might not have a live baby and it would have been a difficult procedure. This was her first pregnancy and she had a ruptured membrane. I thought it was possible to deliver the baby vaginally and I asked mum to push.
"The bottom of the baby came out quite easily and when this happened I thought it was going to be possible. I started to encourage the patient to push. Whilst she was pushing I applied some traction to the baby's feet so I could deliver the baby."
She said the arms were behind the baby's neck and she performed a manoeuvre to release them, adding: "The arms were then delivered and I went to deliver the baby's head, I was trying to flex the baby's head but I didn't feel the baby move and the cervix started to close. I tried to deliver a couple of times and asked for help. I said it was head entrapment by the cervix."
Dr Laxman said she to tried to cut the cervix but the incision had no impact. She added: "The patient was quite distressed by this point and she was verbally in pain. I remember her saying "you need to stop, you can't carry on" and she was given general anaesthetic.
"We made another cut to the cervix and I used my index finger to flex the baby's head to deliver the baby was using traction to deliver the baby. But at some point between the general anaesthetic and the decapitation, the baby died, I'm not sure when. I was told the neck was tearing and that's when I knew the baby had died."
The hearing continues.