An arms manufacturer admitted paying a private investigation agency to gather information on activists and groups including Campaign Against Arms Trade (CAAT).
BAE paid £2,500 per month to LigneDeux Associates, whose agent Paul Mercer passed information about CAAT to BAE's Director of Security, Mike McGinty.
BAE insist that they expected Paul Mercer to operate within the law, but he has now admitted providing them with a legally privileged document internal to CAAT.
The document concerned the impending judicial review of the Serious Fraud Office decision to end an inquiry into BAE's arms deals with Saudi Arabia.
BAE's deal with LigneDeux came to light after legal action by CAAT resulted in an affidavit from Mike McGinty.
Paul Mercer has stated that McGinty tipped him off about the contents of the affidavit on the day that it was sent to CAAT. Following the tip-off, he closed down the e-mail address that he had used for passing information to BAE.
Paul Mercer insists that he was sent the document anonymously, receiving it in on CD-ROM in the post less than 24 hours after it was written.
CAAT has now referred this matter to the police.
CAAT spokesperson Symon Hill said: "Just as it seemed that BAE's reputation could sink no lower, they have admitted paying an agent to investigate peaceful campaigners. CAAT is an open and nonviolent organisation with thousands of supporters from all walks of life. BAE's underhand methods further call into question the intimate relationship between BAE and the Government."
Campaign Against Arms Trade (CAAT) works for the reduction and ultimate abolition of the international arms trade.