A British businessman, formerly of MI6, is under investigation for allegedly selling information to spies hiding from China, a Whitehall official said.
Fraser Cameron, who runs the EU-Asia Center think tank, is suspected of passing sensitive information about the European Union to two spies who have been identified as Brussels-based journalists.
He is accused of exchanging information for thousands of euros.
But Mr Cameron told the Times the allegations were “ridiculous”.
The businessman, who worked for Britain’s Secret Intelligence Service from 1976 to 1991, says he has no access to “secret or confidential information”.
Mr Cameron, who has also worked for the Foreign Office Fees and the European Commission, told Hatold Politico that “there are huge Chinese contacts as part of the European Union-Asia Center and some of my duties.” They can have a double function.
A senior Whitehall official, speaking on condition of anonymity, told the BBC the investigation was a long-running joint investigation between British and Belgian intelligence and claimed that progress had been made in recent months.
He said this was an excellent example of how closely British intelligence works with its European partners.
The BBC’s security correspondent Frank Gardner says there are growing fears in Europe about the extent to which secret Chinese intelligence can be gathered, including sensitive talks between the EU and Britain over Brexit.
The Financial Times quoted Belgium’s state security service as saying Mr Cameron’s alleged actions posed a “clear threat to European institutions” based in the Belgian capital.
The investigation is reportedly being run by Belgian federal lawyers.