Reporter: Uproar at Mossad over Australia Spy Story

The journalist who revealed the identity of a prisoner kept incommunicado in Israel described on Friday the frantic reaction of Israeli spy chiefs desperate to keep a lid on the mysterious story.

"Prisoner X", identified by media as Australian-Israeli Mossad agent Ben Zygier, died in December 2010 while in isolation at Ayalon prison near Tel Aviv, in a case Israel tried hard to cover up until it was revealed this week.

Zygier was reportedly set to reveal information about operations conducted by Israel's external espionage agency Mossad, including the misuse of Australian passports by its agents.

Australian reporter Trevor Bormann, who broke the story on Tuesday, said Israeli intelligence services were aware his report was going to air with a promo going viral on social media and a news release sent out the previous week.

"My sources told me that it was 'all hands on deck' for Mossad and Israel's internal security service Shin Bet," he said on the website of his employer, the Australian Broadcasting Corp.

"Their intelligence had told them that the mainstream Israeli media would most likely grudgingly abide by the court gag order, and that the main task for censors would be to 'pull down' the work of bloggers who would be posting links to our story.

"It did not work out quite like that."

As the story went global, Israel Wednesday admitted it imprisoned a man with dual nationality on security grounds in 2010 who later committed suicide, but did not identify him nor confirm reports he worked for Mossad.

But Israeli lawyer Avigdor Feldman, who met Zygier just days before his death, confirmed that Mossad agents had been involved in the case and said he saw no indication the prisoner was planning to kill himself.

According to the Sydney Morning Herald, Australian intelligence officials believe Zygier may have been about to reveal Mossad operations, including the use of falsified Australian passports, to either Canberra or the media when he was arrested.

Zygier "may well have been about to blow the whistle, but he never got the chance", said an Australian security official familiar with the case.

Asked to comment on Israel's use of Australian passports for espionage activities, Australia's department of foreign affairs said it would not be able to say anything before Monday.

Stephen Smith, who was the Australian foreign minister at the time, also refused comment Friday, saying he was "not proposing to be drawn on any of the issues" until an ongoing review of the case is complete.

Current Foreign Minister Bob Carr said Canberra first learned of Zygier's arrest "through intelligence channels" on February 24, 2010.

Just a week earlier, Dubai police had publicly accused Mossad agents of carrying out a January hit on a top Hamas militant, saying they were looking for around a dozen people with Western passports -- four of them Australian.

The move sparked a crisis between Israel and several Western governments, including Canberra, with a resultant freeze in intelligence contacts meaning Zygier's case was not pursued by Australia until his death, the Herald said.

Shortly after the Dubai assassination, it emerged that Australia's overseas intelligence agency had been investigating Zygier on suspicion of using his passport to spy for Israel, the Herald reported.

Former Australian Secret Intelligence Service official Warren Reed told the ABC Friday that Israel must have believed Zygier knew something damaging.

"So if he divulged that information to somebody who was from a hostile intelligence service, hostile to Israel, he could damage Israel's national security in not only an immediate sense but ongoing for 10, 15, 20 years," he said.