Revelations by former US National Security Agency contractor Edward Snowden last year that Washington spied on German officials - including bugging the phone of Chancellor Angela Merkel - had already brought relations between the US and one of its closest allies to a new low.

According to both US and German officials, Markus R. was a "walk-in agent" - someone who presents himself on his own to a foreign spy service and dangles an offer of secrets.

The Germans say the CIA should never have accepted.

"No intelligence service in the world can protect itself from the classic walk-in agent who offers their services elsewhere," a German security source said. "But it is a highly unusual and hostile act for an allied intelligence service to accept such a walk-in," the source added.

According to both US and German sources, Markus R. had a desk job at the BND's vast headquarters in Pullach in southern Germany, working for a department responsible for the protection of soldiers serving abroad.

"He may have been craving thrills or attention. He'd worked for the BND for about eight to 10 years," the German source said.

He approached the CIA by e-mail in 2012, offering to provide them with information. As he worked in an area responsible for handling message traffic between headquarters and the German agency's out-stations around the world, he would have had access to a wide range of sensitive material.

On receiving his e-mail, Austria-based CIA officers answered him and arranged further contacts. Most were by e-mail, but he told investigators he also met a CIA contact three times in Austria, across a border just an hour's drive from Pullach.

During searches of his home, German authorities recovered a USB memory stick with 218 documents stored on it. Markus R. told them he had received €25,000 (HK$262,000) for the information, the German security source said.

To Berlin's anger, he also passed on documents about a parliamentary committee set up in the wake of Snowden's revelations to investigate the mass snooping on German citizens by the NSA. The deputy of one of the committee's eight members had visited Snowden in Moscow last year, and its head, Patrick Sensburg, said its members had feared they might be spied on.

The US has refused to comment publicly on Markus R., but US government officials privately acknowledge he had been in contact with the CIA and that the agency believed it had obtained valuable information from him.

But in espionage lore, the biggest problem with "walk-in agents" is that you can never fully know who else they might be working for. In the case of Markus R., the reason the CIA's man was finally caught was that he also tried to work for Moscow.

Agents from Germany's domestic intelligence service picked up an e-mail he sent to the Russian consulate in Munich in late May this year, offering to sell BND documents to the Russians, according to German media and a US source. The German agents replied to him, posing as Russians to lay a trap.

The Germans told their American intelligence colleagues they had located a suspected Russian spy in the BND - not realising that the mole was working for Washington as well. Within a day, an e-mail address Markus R. had used vanished from the internet. Only then did the Germans realise their man had been working for both cold war superpowers, German media reported.

Markus R. was detained on July 2, and formally arrested and charged a day later.

"We don't take the matter of spying for foreign intelligence agencies lightly," Merkel's spokesman Steffen Seibert said.

That would not be the end of the affair. On July 9 the federal prosecutor's office said investigators were searching the Berlin home and office of a second suspected spy. The Defence Ministry said he worked in its headquarters. The second man has not been arrested. Reports said a payment he received from an American triggered suspicions that he might be a US spy, but US officials familiar with the case said he was in contact with a US State Department officer rather than intelligence agents.

According to newspaper the , Markus R. had tipped off the Russian consulate that Germany was investigating whether the second man was a spy for Moscow. After the raid on the second man's home, Merkel decided enough was enough. Under public pressure to act, the chancellor agreed with ministers to ask the head of US intelligence in Germany to leave - a highly unusual step.

"This is as a result of ongoing investigations by the federal prosecutor and because of questions left open for months over the activities of US intelligence in Germany," her office said in a terse statement. It is essential for Germany to work with Western intelligence partners, in the interests of keeping German citizens safe, the statement continued. "But for this, mutual trust and transparency are necessary."

The alleged spying raised questions about whether the White House was keeping a close eye on what its intelligence agencies were up to inside an allied country, and if it was worth the political cost, experts said.

The Germans have a valid complaint to say "this is too much, you've gone too far, you need to back off", said James Lewis, a former US intelligence official and a senior fellow at the Centre for Strategic and International Studies.

Some suggested the information they obtained could be gathered through more diplomatic channels. To jeopardise ties with Germany for information that could be obtained without spying suggested a bureaucracy on autopilot, said a former Western diplomat. "It's stupidity beyond belief," the ex-diplomat said.

Some American experts argue Washington has a legitimate reason to be concerned about Russian influence and espionage in Germany, a charge that German officials dismiss. "It's a matter of one's own risk calculations," a former US intelligence officer said. "That's the way it's always going to be."