Blake, who now lives in poverty in Moscow, after escaping from Wormwood Scrubs prison in 1961, turned down an offer to appear personally to defend himself.
He declined to offer any defence but is being represented by Lord Lester QC, who is also appearing for his London publishers, Jonathan Cape, in a parallel action brought by the Attorney General.
Mr Philip Havers QC, representing the Attorney General, told the Vice Chancellor, Sir Richard Scott, that Blake had broken his trust with the security and intelligence services by writing the book, No Other Choice, which deals with Blake's time with MI6 between 1947 and 1961, displayed a "flagrant disregard" of his duties, from which he had "unjustly" made money, said Mr Havers.
He said that although there was no breach of confidence - Blake had already told the Russian authorities all the secrets he knew - a fiduciary duty remained.
Because the information had been passed to the Russians, it could no longer be regarded as confidential, said Mr Havers. It was a breach of confidentiality in that Blake had broken the trust of the security services.Therefore, the correct remedy would be for the Crown to take any profits he had made.
Jonathan Cape, who are not defending the action, hold the profits of the book, which have been frozen since publication in 1991.
Blake, 73, who was responsible for the deaths of several British agents, received a pounds 35,000 advance for the book he wrote in Moscow.
Lord Lester, appointed by the Crown to look after Blake's interests, said that if the former security officer was prevented from publishing a story about his life because he was employed by the Crown, then ministers should be subject to the same code and stopped from publishing their memoirs.
The hearing was adjourned until today.Reuse content