Security officials suspect that Ben Zygier, the alleged spy who died in a secret Israeli prison in 2010, may have been about to disclose information about Israeli intelligence operations, including the use of fraudulent Australian passports, either to the Australian government or to the media before he was arrested.
Mr Zygier ''may well have been about to blow the whistle, but he never got the chance'', an Australian security official told Fairfax Media.
Israeli ambassador pursued over Prisoner X
RAW VISION: Israeli ambassador Yuval Rotem refuses to answer questions about the arrest and death of Australian man Ben Zygier, known as Prisoner X.
Sources in Canberra are insistent that the Australian Security Intelligence Organisation (ASIO) was not informed by its Israeli counterparts of the precise nature of the espionage allegations against Mr Zygier. However, it is understood that the Melbourne law graduate had been in contact with Australian intelligence officers.
Israeli intelligence informed ASIO of the arrest and detention of Mr Zygier just eight days after authorities in Dubai had revealed that suspected Israeli agents had used fraudulent Australian passports in the assassination of a Palestinian militant.
The consequent crisis in Australian-Israeli intelligence relations provided the context in which the Australian diplomats did not seek consular access to Mr Zygier, who was regarded by Australian security officials as a potential whistleblower on Israeli intelligence operations.
The Foreign Affairs Minister, Bob Carr, on Thursday revealed that the government learnt of Mr Zygier's detention through ''intelligence channels'' on February 24, 2010. He told a Senate estimates hearing that Israel had ''detained a dual Australian-Israeli citizen - and they provided the name of the citizen - in relation to serious offences under Israeli national security legislation''.
Fairfax Media has been told by security sources that ASIO's liaison office in Tel Aviv was notified of Mr Zygier's detention by the Israeli security agency Shin Bet. It is understood that ASIO promptly notified the Department of Foreign Affairs and Trade (DFAT), including the ambassador to Israel, Andrea Faulkner.
However, officials were unclear when or whether the then foreign minister, Stephen Smith, was briefed. Senator Carr's office declined to respond when asked on Thursday about the government's precise knowledge of Israeli allegations about Mr Zygier and the reasons for his secret detention. As no request for consular assistance was made by Mr Zygier or his family, the matter was left to intelligence liaison channels. No consular contact was made with Mr Zygier, and Australian diplomats did not become involved in the matter until after his reported suicide in prison in December 2010.
Mr Zygier's detention came at an increasingly tense time in Australian-Israeli relations.
On February 16, 2010, Dubai authorities revealed that suspected Israeli agents had used Western passports in a covert operation that resulted in the assassination of Hamas leader Mahmoud al-Mabhouh in the United Arab Emirates.
News of the Israeli passport fraud caused a strong reaction from the then prime minister, Kevin Rudd. On February 25, according to a US diplomatic cable published by WikiLeaks, DFAT told the US embassy in Canberra that ''Australian officials are 'furious' all the way up the chain of command over the incident, and Prime Minister Rudd has vowed to get to the bottom of it''.
Australian Federal Police investigators travelled to Israel to pursue the Dubai passport fraud case, and that was followed by a visit to Tel Aviv by ASIO director-general David Irvine, who met Israeli intelligence chiefs. Mr Irvine subsequently provided a classified report to the government on the passport fraud issue.
However security sources have told Fairfax Media that the ASIO director-general did not raise the case of Mr Zygier.
Senator Carr told the Senate hearing that the Australian government sought ''specific assurances'' that Mr Zygier's legal rights would be respected and the government relied on these assurances. DFAT on Thursday declined to provide details of these exchanges.
Zygier's spy denial 'very convincing'
Speaking to Lateline, former Fairfax correspondent Jason Koutsoukis recalls his conversations with Ben Zygier, the last of which was just weeks before he was imprisoned in Israel.
On May 24, 2010, Mr Smith told Parliament that the government was ''in no doubt that Israel was responsible for the abuse and counterfeiting of [Australian] passports'' in connection with the assassination of Mabhouh and announced that a senior unnamed Israeli diplomat was being expelled in response to Israeli's actions and refusal to co-operate with Australian investigations.
The diplomat, given one week to leave Australia, was embassy counsellor Eli Elkoubi, an officer of the Israeli foreign intelligence service Mossad.
Israeli diplomats complained privately after Mr Elkoubi's name and status as an intelligence officer was published in The Canberra Times.
Mr Zygier's father Geoffrey, executive director for B'nai B'rith Anti-Defamation Commission, has declined comment.