MI6 WAS forced to halt a spying operation after it lost secret electronic equipment worth tens of thousands of pounds and intelligence records in a suspected arson attack.

The incident followed the falling-out of MI6 and the Croatian security service, the third time in recent years that Britain’s overseas security service has found itself in a turf war with a foreign counterpart.

A surveillance vehicle loaded with eavesdropping equipment was extensively damaged after it was torched while parked in a supposedly secure area next to a hotel in a suburb of Zagreb, the Croatian capital.

MI6 blames disaffected members of the Croatian POA (Protuobavjestajne Agencije). To make matters worse, details of the supposedly secret MI6 listening operation were then leaked to a Croatian magazine.

MI6 had previously been forced to withdraw officers from Prague and Belgrade after their names and secret operational details were disclosed to television stations and newspapers by angry local officials.

The incident is a blow to the service, which last week had to admit officially that the source of the “45-minute” warning in the government’s Iraq intelligence dossier was unreliable.

Some MPs and a former senior intelligence official are calling for far-reaching reforms. They say that MI6 has lost its way and should be accountable to parliament, not the prime minister.

Norman Baker, the Liberal Democrat MP for Lewes, East Sussex, takes a close interest in intelligence matters. He said that MI6 had become accident-prone and there should be a government review.

David Bickford, a former legal director of MI5 and MI6, said both organisations were burdened with bureaucracy and distracted by inter-agency squabbling — and were not doing their jobs properly.

“There is too much secrecy,” he said. “The agencies are dealing with terrorism and organised crime, not communist subversion, so it is time for them to go public and be accountable to parliament.”

MI6 became involved in a dispute with a Croatian security official after it sent officers and listening equipment to Jankomir this summer to track down Ante Gotovina, the third most-wanted war crimes suspect in the Balkans.

Gotovina has been indicted by the International Criminal Tribunal for the former Yugoslavia in the Hague and has a $5m (£2.8m) reward on his head. Diplomats have speculated, however, that MI6’s real interest in the former general springs more from his links to weapons consignments that were smuggled to the Real IRA. A grenade launcher from one shipment was used to attack MI6 London headquarters at Vauxhall Cross four years ago. “It was personal from MI6’s point of view,” said a senior British source.

The van was attacked in a compound next to the Holiday Inn in Jankomir, where MI6’s eavesdropping equipment was stored in three Bedford vans. The British officers had hoped to work with their local counterparts, monitoring mobile phone calls made to Gotovina.

The former head of the POA, Franjo Turek, is believed to have resigned earlier this year in protest at what he felt was a British intrusion into the affairs of a sovereign state.

The incident follows a debacle in Serbia when Anthony Monckton, a senior MI6 officer, was recalled after he was named in February in a book by Zoran Mijatovic, former deputy chief of the Serbian intelligence service. A Belgrade newspaper then printed Monckton’s photograph, phone number and e-mail details, forcing him to return to Britain.

Monckton’s replacement also returned to London after he was named in the weekly news magazine Nacional, in a Belgrade newspaper and in Mijatovic’s book. He had earlier been named on the internet.

Ivo Pukanic, the editor of Nacional, which had revealed the names of the four main British MI6 agents, said British authorities had afterwards refused to allow him to visit London. “I am 100% sure that the reason was articles in Nacional about MI6 dirty activities in Croatia,” he said.

In 1999 Christopher Hurran, MI6 chief of station in Prague, was outed on Czech television as a homosexual and a spy. Hurran was reported to have written to Jaroslav Basta, minister for the secret services, complaining that the Czech counterintelligence service did poor quality work. The head of Czech counterintelligence was sacked and shortly afterwards Hurran’s name was leaked.

The Croatian government has been told by Britain that it must catch Gotovina to help to pave the way for EU membership.

MI6 refused to respond to criticism of the agency.

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