MI5 was accused last night of failing to vet recruits properly after it emerged that one of its surveillance officers was married to a prostitute who exposed Max Mosley's involvement in a sado-masochistic orgy.

The MI5 officer, who is in his forties and had joined the Security Service after a career in the Royal Marines, with whom he specialised in surveillance, was forced to resign last month when his wife's “inappropriate job” became known.

It is alleged that he had failed to disclose her work when he was vetted for a post in the Security Service.

Security sources said that suggestions that MI5 might have been involved in a “sting operation” against Mr Mosley were absurd. His participation in the orgy with five prostitutes was reported by the News of the World on March 30.

“Mr Mosley did not and does not pose a threat to national security, and when MI5 has 2,000 terrorists to worry about why on Earth would the Security Service be involved with the head of Formula 1, it's preposterous,” one security source said.

However, the failure to detect that an MI5 officer's wife worked as a prostitute has placed the focus on the organisation's vetting system. Unlike the rest of Whitehall, which uses the Defence Vetting Agency, MI5 has its own department of specialists, who are required to check on the family background of each recruit, and again periodically throughout their career.

Patrick Mercer, MP, a former Conservative homeland security spokesman, told The Times: “When we know that al-Qaeda has attempted to penetrate MI5 by trying to join as recruits, it raises serious concern that the Security Service failed to discover that someone serving in the Royal Marines was married to a prostitute. There has got to be a root-and-branch review of the vetting system in MI5.”

MI5 informed Jacqui Smith, the Home Secretary, of the indirect involvement of a former intelligence officer in the Mosley affair. Whitehall sources said that there had been suggestions for about two weeks that there had been an MI5 operation to undermine Mr Mosley. “But the fact is that a member of the Security Service had a wife with an inappropriate job,” one source said.

The revelations were being seen by Mr Mosley as consistent with his belief that he was the victim of a conspiracy to destroy his reputation. He has hired Lord Stevens of Kirkwhelpington's private detective agency, Quest, to investigate how the original story came about.

Meanwhile, the clamour for Mr Mosley to stand down continues, with Sir Jackie Stewart, the former world motor racing champion, arguing yesterday that his failure to accept calls for his resignation was “inflicting untold damage” on Formula 1.

Despite the pressure on him, Mr Mosley is planning to appear at the Monaco Grand Prix this week. However, after talks with the Royal Family in the Principality, he will not be seen in public with Prince Albert II and will not fulfil formal functions as president of the FIA at Monaco.

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