CANBERRA, Nov 27 AAP - Independent senator Nick Xenophon has called for a royal commission into spy allegations concerning Australia's negotiations with East Timor over an oil and gas treaty.
East Timor has recommenced legal action against Australia in the Permanent Court of Arbitration in The Hague over claims that spies bugged their cabinet room in 2004 during talks over the reserves worth $40 billion.
"It must be an independent judicial inquiry so we can get to the truth of these matters," Senator Xenophon told reporters in Sydney on Friday.
Former NSW director of public prosecutions Nicholas Cowdery QC said it was his preliminary advice that there is at least a prima facie case of conspiracy to defraud East Timor.
"A very junior and struggling country for which we have a lot of responsibility," he told reporters.
Senator Xenophon said an independent judicial inquiry was needed to restore Australia's reputation in the region.
He said an intelligence officer - "Witness K" - who came forward should not have had their home raided and passport seized.
Lawyer Bernard Collaery told reporters Witness K had come forward in a confidential tribunal to give evidence in camera.
"There was no suggestion that this would be a public canvassing of the actions of our security services," he said.
"It was the Australian government that broke the confidential agreement we thought that East Timor had with Australia."
He pointed out the federal government had moved to publicly raid his legal chambers and the home of the veteran intelligence officer.
The Department of Foreign Affairs and Trade is expected to make a decision next week on whether to reissue Witness K's passport.
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