September 27 1998

Richard Tomlinson, a former MI6 officer, said in an interview yesterday that the Royal Bank was close to the secret service. He said it was involved in transferring money to many of MI6's undercover agents overseas.

He made his claim as Germany's central bank began an inquiry into Tomlinson's allegation that one of its officials has been working for British intelligence.

The Bundesbank spy, codenamed Orcada, is said to have provided MI6 and Treasury chiefs with details of Germany's proposed interest-rate movements and its negotiating position during talks on the Maastricht treaty.

The allegations could lead to criminal charges in Germany. They were being examined this weekend by Robin Cook, the foreign secretary.

In an interview with Der Spiegel, the German news magazine, Tomlinson threatened to reveal the identity of the Bundesbank spy if Cook denied the story.

He also named three British banks, including the Royal Bank, which he said had close contacts with MI6. He said they were interested in obtaining intelligence about Germany's economic plans.

Last night, a spokesman for the Royal said: "We are a financial institution regulated by the Bank of England and Financial Services Authority; we clearly work closely with the government, that's absolutely normal, no different from any other bank."

Tomlinson was jailed for six months last year for breaking the Official Secrets Act. In a dossier published on the Internet earlier this month, he described how MI6 had recruited a Bundesbank official.

He claims the German official has been on the MI6 payroll since 1986. His activities are carefully monitored by another MI6 officer working  under diplomatic cover in the British embassy in Bonn.

Tomlinson's claims have been greeted with scepticism by some intelligence experts in Britain. But they are being carefully examined by the Bundesbank in Frankfurt.

Wolfgang Moerke, the bank's chief spokesman, said: "We take these allegations very seriously. But we will wait until the end of our investigation before we comment any further."

Otto Hauser, a German government spokesman, hinted that Tomlinson's allegations could be referred to the prosecutor if the bank finds evidence of a mole.

A Foreign Office spokesman said Cook would study details of the allegations over the next few days. John Wadham, Tomlinson's lawyer, passed a dossier to the Foreign Office and to the parliamentary committee on intelligence and security chaired by Tom King last week.

Wadham said he could not discuss the claims because of the Official Secrets Act but they related to "malpractice and illegality by MI6".

In letters to the parliamentary committee, Tomlinson claimed MI6 had also targeted other allies, including France, Spain, Italy and Switzerland. He said MI6 had a special unit which tried to steal economic and military secrets from Britain's European partners.

His letters also reveal details of an alleged MI6 proposal to assassinate President Slobodan Milosevic of Serbia.

Speaking from Switzerland, where he is effectively in hiding from the British authorities, Tomlinson said that he wanted Cook to act on his claims about the Milosevic assassination plot and the Bundesbank spy.

Wadham also represents David Shayler, a former MI5 officer, who is in jail in France awaiting extradition to London on suspicion of breaching the Official Secrets Act.

Last month Cook ordered a review of Shayler's claims that MI6 was involved in a plot to kill Colonel Gadaffi of Libya. The inquiry found no evidence of direct MI6 involvement.