Phone call hoax that trapped a spy: Security services had been keeping check on Russian agent for 14 years before arrest. David Connett and James Cusick report

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AT 9AM on 8 August last year, the telephone rang unexpectedly in Michael Smith's flat. He had just made love to his wife Pamela. They had eaten breakfast: coffee, and his favourite cereal, crunchy nut cornflakes.

His wife answered it. The caller spoke in a foreign accent. 'Hello, is it Michael Smith?' Mrs Smith asked who was calling. 'George' came the reply.

Handing over the receiver, she had no idea her husband would shortly be accused of Cold War espionage and intrigue going back 20 years.

George was really a British Intelligence officer faking his best Russian accent. 'I am a colleague of your old friend Victor. Do you remember him?' Smith's simple reply of 'yes', like everything else he would do in the next half hour, was recorded by MI5.

George said it was urgent to talk but not over Smith's telephone. He was to be at a local telephone box in 15 minutes.

The call was unusual but then his life had been completely at odds with his unremarkable suburban lifestyle.

He claimed later that he responded out of curiosity. Whatever his reasons, as he left the flat the cameras of hidden Special Branch officers began clicking away.

Smith arrived just too late to take George's call, but the watching detectives moved in and arrested him. An electronics engineer who had worked for two top weapons research companies, he was accused of passing information to an enemy of Britain.

Smith lied throughout 11 hours of police interrogation and continued to trip over his explanations for days in the witness box at the Old Bailey.

Although convicted of spying for the Russians between 1990 and his arrest last year, Smith, 45, of Kingston upon Thames, south-west London, is suspected of spying for the Russians for at least 17 years.

Victor Oshchenko, a KGB agent who alerted MI5 to Smith after defecting to Britain last year, told officers debriefing him that the engineer had been betraying British defence secrets since 1976. They included details of the fuse for Britain's WE-177 free-fall nuclear bomb.

If Oshchenko is correct, Smith is potentially one of the most damaging Russian spies ever recruited in Britain.

Essex-born, he was noticed by Oshchenko as an active member of the Communist Party of Great Britain (CPGB), the Young Communist League and a trade union official.

Smith later claimed he joined the party out of concern for Britain's growing unemployment and thought they had answers.

Describing it as a 'phase I went through', he also claimed he joined to meet girls and for sex.

Despite the fact he became the Surrey branch secretary, Smith said his involvement amounted to selling the party newspaper and attending conferences.

It was his degree in electronics and electrical engineering from Surrey University in 1971 which made him particularly attractive to Oshchenko who persuaded him to apply for jobs with companies involved in defence contracts.

Before applying he was instructed to sever all links with communist organisations and he got a job with Thorn EMI in 1976. When he joined, after signing the Official Secrets Act, he told the company about his other interests including his love of music and playing guitar. In later years he and his wife became flamenco fans and members of Spanish dancing clubs in London.

Friends from this circle describe him as quiet but capable of becoming the life and soul of a flamenco evening. He liked swimming and tennis. He sometimes fantasised about becoming a song writer.

Nowhere did he mention his communist links. These were not discovered until 1978 following what Special Branch officers describe as a 'routine inquiry'.

The Military Security Department of the Ministry of Defence, which has close links with MI5, wrote to John McMichael, defence security manager at EMI Electronics, asking for Smith's details. Crucially they were told he was 'specifically engaged' on the free-fall nuclear bomb fuse project.

MI5 acted quickly and EMI removed him from the project. In May 1978, Mr McMichael wrote to MI5, saying he was 'both pleased and relieved' to confirm Smith had gone to EMI Medical and his access to 'classified matter or to sensitive premises' terminated. Mr McMichael said Smith accepted transfer 'without indicating any suspicion of the real motives behind his move'.

The Old Bailey jury was told that Smith later made 'zealous attempts' to return to defence work.

He even drafted a letter to the then Prime Minister, Margaret Thatcher, complaining his career was being destroyed. He wrote to the MoD criticising the lack of security at EMI. He claimed he was being victimised, comparing himself to Sir Maurice Oldfield, the former director-general of MI6, who in accusations which were never substantiated, was said to have been a double agent.

Smith was never a brilliant engineer, a fact reflected in his pay packet. His lifestyle was basic, but he travelled a lot.

He visited the Soviet Union in 1975, and, in 1977, spent three days in Oporto, Portugal. Smith claimed the trip to a city regarded as a KGB 'training centre' was an innocent holiday. The Crown suggested a sinister motive.

Smith still concerned MI5 three years later. In March 1981, works policemen at EMI's labs were warned that Smith was 'not to be allowed access under any circumstances'.

A letter from the MoD's deputy security director, Ian King, in August 1984, describes Smith as 'content to accept his lot'. Mr King wrote: 'We would of course prefer to let sleeping dogs lie and not to trouble Smith until he troubles us.'

On 14 November 1985, EMI alerted the MoD that Smith had been made redundant and had applied to the GEC-Marconi Hirst Research Centre, north-west London. GEC was also told of his background.

In 1983, President Reagan announced that the US was to develop strategic defences (SDI) against incoming missiles. Billions of dollars went on development contracts for 'star wars' technology. GEC's Hirst Research Centre (HRC), a leading weapons establishment in radar and semiconductor technology, was awarded some.

It also worked on Britain's ground-to-air Rapier missile as well as super-conductivity material projects, military applications of advanced silicon technology and magnetic field detection research to assist submarine detection.

Other projects included military thermal imaging; devices for guided weapons; a missile radar scanning project; an important signal delay system called 'F-band delay line' to identify targets for the Rapier missile; and acoustic wave research applications in chemical and biological warfare.

HRC's star wars contract was a protection system for pilots against incoming laser radiation, using goggles and cockpit covers as radiation defences called 'Rugate Filters'. One scientific witness claimed disclosure could compromise 'possible UK defence systems'.

Smith's clearance was unchanged but as a quality assurance engineer involved in auditing projects he had access to most HRC projects.

In July 1986, his clearance was upgraded to 'company confidential' and he again signed the Official Secrets Act. The man who had given MI5 a fright in 1978 and was frozen out of classified work, was apparently allowed to come in from the cold.

After Oshchenko left London for Moscow in 1979, MI5 believes Smith was controlled by a series of Russian diplomats, all of whom were expelled. Without security clearance, Smith's role as a KGB agent would have been limited. From 1985 they seemed content for him to 'sleep' and wait for an alarm call.

It arrived in September 1990 in letter form. It was hardly classic KGB - they do not usually send handwritten letters. It began 'Dear Mike' and was signed 'Williams'. Smith recognised its hidden code.

In Moscow, Katya Moyorava had just won the title of 'Miss KGB'. In August 1990, Margaret Thatcher, announced in Aspen, Colorado, 'the Cold War is over . . . We don't see this new Soviet union as an enemy'. But if the Cold War really was over and the KGB was appointing beauty queens, it was news to Smith.

Smith's lifestyle and finances changed little during the 1970s and 80s. His salary was around pounds 18,000. The Smiths ran two cars. They were comfortable, often having friends round for 'elaborate Chinese meals'. But in the two years after the Williams letter Smith received pounds 20,000 for documents and information smuggled out of HRC.

Smith and the KGB contact that he handed material to still used traditional KGB meeting places in and around London: parks, recreation grounds, busy shopping malls, railways stations, old haunts at Harrow, Horsenden Hill, and Parliament Hill Fields,

KGB fieldcraft, such as advanced notification of meetings, marks on bollards, signals for safe to meet; signals if unsafe: come back tomorrow; what to carry if danger; codewords and prepared speeches for stand-ins continued to be used.

Two events then changed everything. In May 1992, HRC gave Smith formal notice he was being made redundant. Throughout the next two months he gathered material he thought might be of future use. Two months later, Oshchenko walked into the British embassy in Paris and asked for asylum.

Eight days after the Russians were alerted to Oshchenko's defection, Smith drove to a pre-arranged rendezvous with his KGB contact at Harrow on the Hill with a holdall full of HRC documents and other equipment.

But his contact failed to turn up. Special Branch believes the Russians abandoned him after correctly assuming that Oshchenko would betray him.

(Photograph omitted)