Secret service past returns to haunt Hungary's leaders

The ghosts of Hungary's past have resurfaced with the revelation that 10 government ministers who have held office since the collapse of Communism in 1989 once worked for the country's Moscow-linked secret service.

The scandal, which has triggered a political earthquake in one of Nato's newest member states, broke earlier this summer when the newspaper Magyar Nemzet published documents revealing that Peter Medgyessy, the Socialist Prime Minister, had worked as an agent for the Communist-era counter-intelligence service, known as Interior Ministry Department III/II, in the late 1970s and early 1980s.

The names of 10 more ministers are likely to be released today by the parliamentary committee investigating the past of every government minister appointed since 1989.

According to the committee, nearly all of the 10 ministers served in Hungary's two right-wing governments since 1990. Publication of the names will draw the country's nationalists into the furore. For years they have loudly proclaimed their anti-Soviet credentials.

The governor of the National Bank, Zsigmond Jarai, has already admitted he was an informer for the Interior Ministry before the restoration of democracy.

Mr Jarai served as Finance Minister in the government of Viktor Orban, whose right-wing Fidesz party lost power in April to a centre-left coalition led by the Socialists.

Mr Jarai said he was pressured into signing a statement in which he agreed to write reports on his trips abroad and on foreign assessments of communist Hungary's economic performance.

Imre Boros, who served in the Orban government as minister in charge of EU-funded projects, has also admitted contacts with the secret service before 1989.

Appearing in front of the parliamentary committee earlier this month, Mr Medgyessy, who was known as Agent D-209, testified that his covert task was to ease Hungary's path to membership of the International Monetary Fund.

He said his role was to prevent economic data falling into the hands of foreign intelligence agencies including the KGB, because Moscow was opposed to Hungary's IMF membership bid. Mr Medgyessy denied he wrote reports on his colleagues or that he had been connected to the KGB.

Mr Medgyessy's espionage adventures may sound like the plot of a Cold War thriller, but they have raised eyebrows among Western governments, not least at 10 Downing Street, where the Hungarian premier is viewed as a friend and ally of Tony Blair.

The smoke-filled corridors of the neo-Gothic Budapest parliament buildings are already awash with rumours of dirty tricks. Laszlo Balogh, the chairman of the committee investigating Mr Medgyessy, found a live bullet in his office, which he said was left there as a message.

Sebestyen Gorka, an adviser to the Medgyessy inquiry, said: "Medgyessy makes these Alice-in-Wonderland claims that he was the only deep cover secret policeman who never spied on people, who rarely wrote reports and then only about the economy of Communist Hungary. It is patently clear that his account to us cannot be equated with reality, given the testimony of senior former secret police officers and the declassified documents from that time."

But Mr Medgyessy has turned the tables on his opponents by promising to introduce freedom of information legislation.

Miklos Haraszti, a commentator and Communist-era dissident, said: "The right wing thought that Medgyessy would not dare to fight back by opening up the Communist-era archives and revealing the past involvements of right-wing figures. But now it has backfired, and he is the victor."