The unnamed man, who worked at a state military enterprise, was arrested in Moscow as he downloaded classified information onto a sophisticated mini-computer hidden in a fake rock by British intelligence agents.

His cover was blown after MI6 agents were tailed for weeks by officers from the Federal Security Bureau (FSB), the former KGB. They led the FSB first to the rock and then to the Russian, who was repeatedly filmed acting suspiciously as he passed by with his dog.

“He was caught red-handed and confessed to selling secrets,” said the source. “The information he passed to his British handlers is being carefully studied so that we can assess how sensitive it is. Investigators will then evaluate the damage he inflicted on the Russian state. He could end up in jail for as long as 20 years.”

Last night the Foreign Office in London was investigating reports that two spies working for British intelligence had been arrested. It was unclear whether they included the state military enterprise employee.

The scandal broke last week when Russian state television broadcast footage shot surreptitiously by the FSB. It showed four suspected British agents apparently downloading information from the rock.

The FSB claimed it had decided to blow their cover after an unofficial complaint to MI6 was rebuffed. But the timing of the controversy suggests ulterior motives.

Officials emphasised that Marc Doe, a second secretary in the British embassy’s political section who was caught on camera, had signed payments totalling more than £300,000 to 12 non-governmental organisations (NGOs) working to improve human rights and promote a civil society in Russia.

The FSB said the payments proved that foreign intelligence services were paying the groups to stir up opposition to the Kremlin. President Vladimir Putin seized on the spying scandal to defend legislation he signed this month that is expected to restrict the work of NGOs.

“It has now become clear to many why Russia passed a law regulating NGO activities . . . I think we have a right to say that the money in this case stinks,” Putin said of Doe’s payments.

Putin, who spent 16 years in the KGB, also said he was undecided about whether to expel the British men. Four British diplomats accused of running a spy ring were sent home in 1996.

“If we send them away, more will come. Maybe clever ones will come. And we will have to struggle to find them,” Putin explained.

The FSB has failed to prove that the payments signed by Doe were anything other than transparent bank transfers of Foreign Office funds intended to benefit Russian society.

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