A Canadian agent has alleged he spied on two British cabinet ministers for former Prime Minister Margaret Thatcher in 1983.

Former agent Mike Frost said he had spied on the two ministers through the Echelon surveillance system, a Cold War network capable of intercepting private telephone conversations, faxes and e-mails worldwide.

Echelon, a series of listening posts around the world run by the United States, Canada, UK, Australia and New Zealand, was designed to eavesdrop on suspected terrorists, drug lords and other governments hostile to the five members.

'Weren't onside'

Mr Frost told CBS's 60 Minutes programme: "[Thatcher] had two ministers that she said, quote, 'they weren't onside,' unquote ... so my boss went to London and did intercept traffic from those two ministers."

The former agent, who said he worked for Canadian intelligence from 1972 until 1992, claimed the five countries could circumvent domestic laws against spying on citizens by asking another Echelon member to do it for them.

"The UK Parliament now have total deniability," Frost said, referring to the alleged spying on the two ministers, whom he did not identify.

"They didn't do anything ... we did it for them."

He said the two ministers were not suspected of being traitors, but Baroness Thatcher felt they disagreed with her over certain policy matters.

The report did not say what those disagreements were.

The allegations come in the same week that a European Parliament report said Echelon was used for industrial espionage.

The UK government denied on Wednesday it used Echelon for industrial spying in Europe that could help US corporations win contracts ahead of European companies.

A senior British Foreign Office official said in response to the European Parliament report that "any surveillance that there is in Britain has to be authorised in accordance with the law as does any American activity here".

Baroness Thatcher's office has so far refused to comment on the accusations.