Mikhail "Michael" Repin, an officer from the Russian foreign intelligence service, the SVR, was thrown out after a surveillance operation highlighted his activities.
Repin, who was officially a Third Secretary in the political section of the Embassy in Kensington Palace Gardens, also approached people with links to British security and defence companies.
A Sunday Telegraph investigation can reveal new details of the spy – who has not previously been identified – and how he attempted to win the trust of officials he met at the House of Commons and defence and security think tanks in Whitehall.
His role gives a startling new insight into how Russia is targeting Britain as source of intelligence at a level not seen since the height of the Cold War.
MI5 believe the UK is now Russian intelligence's "highest priority target", after the US, because of its key role in Nato and the EU and that it now has between 30 and 50 spies working under diplomatic cover from its London embassy.
The SVR and the other Russian intelligence services are the key to how Russian leader Vladimir Putin, a former KGB spy, maintains his grip on power.
The spy agencies are now likely to become even more important as Putin uses them to deal with the growing unrest and protests in the wake of the recent elections which were narrowly won by his United Russia party amid claims of ballot rigging and intimidation.
"Within the UK", a recent MI5 assessment said, "the Russian intelligence service are interested in a broad range of requirements including government policies on EU, Nato, trade finance and the UK-US relationship."
It is also focused on "the strategic nuclear deterrent, energy ... civilian and military science and technology, political dissidents and UK intelligence agencies."
For two years Repin was engaged in talent-spotting British citizens who might provide the Russians with useful intelligence or were connected with someone with access to sensitive information.
A British security expert who met Repin at a Whitehall event said: "He was very friendly and his English was very good. I did not for one moment think he was a spy. I didn't even realise he was Russian until later."
