Russian spies in Australia at 'near Cold War level'

RUSSIA has boosted the number of spies in Australia to near Cold War levels, forcing ASIO to respond by training a new generation of counter-espionage officers.

The growing Russian threat comes on top of an even larger rise in the number of Chinese agents operating in Australia in recent years, as a booming economy and record defence spending provide a wealth of new opportunities for traditional espionage.

Russia and China's increased espionage activity has been made easier by the overwhelming focus of Western intelligence agencies, including ASIO, on al-Qa'ida and other Muslim extremist groups.

It comes at a time of growing tensions between the West and Russia over spies, with London and Moscow embroiled in a deepening diplomatic row over the fatal radioactive poisoning of former Russian spy Alexander Litvinenko in Britain.

Sources have told The Australian that Russia and China pose the most serious espionage threat to Australia's national interests since the days of the Cold War.

ASIO has responded to the challenge by urgently boosting the ranks of its counter-espionage team and allocating more money and resources for 2007-08 to its new Counter-Espionage and Interference Division.

The threat posed by foreign agents is such that ASIO chief Paul O'Sullivan plans to lift ASIO's spending on traditional counter-espionage activities each year until 2011.

A spokeswoman for the Attorney-General, Philip Ruddock, yesterday confirmed that ASIO had recently boosted its resources dedicated to counter-espionage but declined to comment on the nature of the threat or identify specific countries.

"The establishment of a division dedicated to counter-espionage, foreign interference and foreign intelligence collection has permitted a closer and more intensive focus by senior managers on these particular functions," the spokeswoman said. "The additional staffing will allow ASIO to broaden the scope and reach of its counter-espionage and foreign interference investigations, and to expand its outreach activity to government departments and agencies."

However, ASIO - in a submission to the parliamentary joint committee on intelligence and security in February this year - said it needed to use experienced officers to provide "effective mentoring and training" to its younger officers learning the ancient spy craft of counter-espionage for the first time.

The new ranks of Russian and Chinese spies in Australia are focusing on military, scientific and industrial espionage at a time of prolific defence spending and the commodities boom.