Sinn Fein expels British spy
Denis Donaldson, 55, a former head of administration at Stormont, said he was recruited in the 1980s as a paid agent.
Hours earlier, Sinn Fein's leader, Gerry Adams, announced that he had thrown Mr Donaldson out of the party after he admitted working for the British security services.
Mr Donaldson said he deeply regretted his activities.
In a statement last night, Mr Donaldson said: "I was not involved in any republican spy ring in Stormont. The so-called Stormontgate affair was a scam and a fiction, it never existed, it was created by Special Branch.
"I deeply regret my activities with British intelligence and RUC/PSNI Special Branch. I apologise to anyone who has suffered as a result of my activities, as well as to my former comrades and especially to my family who have become victims in all of this."
Mr Donaldson was working as a Sinn Fein Assembly group administrator in parliament buildings during the PSNI raid on the party's offices in October 2002, which has since become known as the Stormontgate affair.
In his statement, he said: "I was a British agent at the time. I was recruited in the 1980s after compromising myself during a vulnerable time in my life.
"Since then, I have worked for British intelligence and the RUC/PSNI Special Branch. Over that period, I was paid money."
Admitting that he was a special branch informer, the former Sinn Fein member stressed he did not believe there was a republican spy ring at Stormont.
"My last two contacts with Special Branch were as follows: two days before my arrest in October 2002 and last night, when a member of the Special Branch contacted me to arrange a meeting," he said. After giving his statement in a Dublin hotel, Mr Donaldson said he would not answer any more questions.
"That ends the briefing," his solicitor, Peter Madden, said.
Mr Donaldson's expulsion from the party also raised major questions for Downing Street after Tony Blair categorically denied during Prime Minister's Questions this week that the decision not to proceed with the case was politically motivated.
Mr Adams moved to distance Mr Blair from the scandal. "I would be shocked if for one moment if I thought that the British Prime Minister was part of any plot to take down a power-sharing executive he had spent a considerable amount of time - along with the rest of us - putting in place," the Sinn Fein leader said.
In October 2002, Mr Donaldson, his son-in-law, Ciaran Kearney, and a civil servant, William Mackessy, were arrested on suspicion of operating a spy ring at Stormont.
Police raided Sinn Fein's offices at Stormont in scenes which resulted in the then Northern Ireland secretary, John Reid, suspending devolution in Northern Ireland in an attempt to stave off a Unionist walkout from the power-sharing executive.
Eight days ago, the Public Prosecution Service announced that it was no longer pursuing a case against the three men because it was not in the public interest. At a Stormont press conference last week, Mr Donaldson and Mr Adams insisted that there was no republican spy ring at Stormont.
But Mr Adams said last night a quite different spying operation had gone on within the ranks of his own party.
Mr Donaldson approached a Sinn Fein official, Declan Kearney, on Thursday after being warned by the Police Service of Northern Ireland that he was going to be exposed publicly as an agent and that his life was in danger.
At a later meeting with Mr Kearney and another Sinn Fein official, Leo Green, Mr Adams said Mr Donaldson had admitted to being a British agent.
Asked if he suspected there had been an informer within Sinn Fein's ranks, Mr Adams said: "I was very, very suspicious and some of us were very suspicious when the events of 2002 unfolded, when we saw this hugely orchestrated operation at Stormont because we knew there was no Sinn Fein spy ring at Stormont.
"More recently, when this case collapsed, when the British did not prosecute, that suspicion was deepened. I had suspicions that there was somebody wrong within this - I had no specific suspicions about Denis Donaldson."
The Sinn Fein party leader said earlier that he would be speaking to both Mr Blair and the Taoiseach, Bertie Ahern, to brief them on the situation.
The Ulster Unionist leader, Sir Reg Empey, asked for an immediate meeting with British officials to discuss the affair. "It actually debunks the claims by Sinn Fein there was no spy ring operating inside Stormont, when in fact there was," he said.