The US man held over the shooting deaths of two men in Pakistan has been revealed as a CIA agent on assignment at the time, the Guardian reports.
Authorities in Pakistan charged Raymond Davis with murder, but the US government insisted he had diplomatic immunity as an 'administrative and technical official', sparking an international row.
Prosecutors say Davis fired ten shots with a semi-automatic weapon when two men pulled up in front of his car at a red light in Lahore in January, awith one of the men being shot twice in the back as he fled.
The Guardian said its information is based on interviews held in Pakistan and the US, and that a senior Pakistani intelligence official said it was 'beyond a shadow of a doubt' that the former special forces officer was employed by the CIA.
On Saturday, the spokeswoman for the ruling Pakistan People's Party resigned Saturday days after backing the claims of diplomatic immunity, AFP reported.
Pakistan's ties with the United States have been strained since police arrested Raymond Davis, who confessed to killing the two men in self-defence on a busy street in the eastern city of Lahore on January 27.
On Monday Fauzia Wahab said diplomats have immunity and that Davis had an official visa, in comments swifty dismissed as personal views by a presidential spokesman.
"I have resigned because I gave that statement in my personal capacity," Fauzia Wahab told AFP.
"I do not want to appear before Lahore High Court as an office-bearer of the Pakistan People's Party. To uphold the dignity and respect of my party I have resigned from my post," she added.
Wahab had said that Davis had an official business visa "so why argue and why are we risking our overall good reputation before the rest of the world? We have always abided by international laws and conventions," she had said.
The ruling party has also ditched Pakistan's former foreign minister Shah Mehmood Qureshi in a recent cabinet reshuffle.
Qureshi, who was still in his post at the time of the shootings, said Wednesday that in his view Davis did not have full diplomatic immunity.
Pakistan's unpopular President Asif Ali Zardari and Prime Minister Yousuf Raza Gilani, struggling to keep his coalition in power, say it is up to the courts to decide on the case.
On Wednesday, Gilani asked Islamic scholars to help, suggesting that the families might pardon the American and telling clerics that the government was caught between a public backlash and international anger.
US Senator John Kerry visited the country last week to hold talks with Pakistani leaders aimed at resolving a bitter diplomatic row, but returned empty handed, the Guardian reported.