A lawyer representing East Timor in its spying case against Australia says his office has been raided by the Australian Security Intelligence Organisation (ASIO).

Bernard Collaery says a number of agents seized electronic and paper files on Tuesday afternoon from his law practice in Canberra.

He says the agents identified themselves as working for ASIO and the AFP, and would not show his employees the search warrant because it related to national security.

East Timor will launch a case in The Hague alleging the Australia Secret Intelligence Service (ASIS) covertly recorded Timorese ministers and officials during oil and gas negotiations in Dili in 2004, allegedly giving Australia the upper hand.

Mr Collaery also says a key witness in the Timorese case - a former spy turned whistleblower - has been arrested in a separate raid in Canberra.

Key points ASIO raids the office of lawyer Bernard Collaery who is representing East Timor in a spying case

ASIO raids the office of lawyer Bernard Collaery who is representing East Timor in a spying case Mr Collaery says he has evidence Australia spied on East Timor during a treaty negotiation

Mr Collaery says he has evidence Australia spied on East Timor during a treaty negotiation He says a key witness in the case, a former spy, has been arrested in Canberra in another raid

He says a key witness in the case, a former spy, has been arrested in Canberra in another raid ASIO will not confirm the office raid, but Attorney-General George Brandis says he approved it

ASIO will not confirm the office raid, but Attorney-General George Brandis says he approved it Mr Collaery says Australian agents seized paper and electronic documents in the raid

Mr Collaery says Australian agents seized paper and electronic documents in the raid The alleged evidence of Australia's spying is already at The Hague

The ABC is trying to confirm the arrest, but has spoken to someone present during the office raid, which was said to have lasted six hours.

The ABC understands the whistleblower underwent questioning throughout Tuesday evening.

Mr Collaery says the witness, who was expected to give oral evidence at The Hague, is "not some disaffected spy" but the former director of all technical operations at ASIS.

"We're talking about a very senior, experienced, decorated officer who formed a proper view, as would any good person, that there was a wrong operation," he told Lateline.

Mr Collaery has accused ASIO and the Government of being "crass" by "muzzling the oral evidence of the prime witness".

"What do you think the tribunal [at The Hague] is going to think of it?" he said.

The Dili negotiations in question led to the lucrative Certain Maritime Arrangements in the Timor Sea (CMATS) treaty, with both countries agreeing to a 50-50 split of an estimated $40 billion in revenue from the gas development.

Space to play or pause, M to mute, left and right arrows to seek, up and down arrows for volume. Watch Duration: 2 minutes 35 seconds 2 m 35 s ASIO raids premises of whistleblower and lawyer ( Jason Om )

But the treaty is now under threat, with East Timor launching a case to the Permanent Court of Arbitration at The Hague over the allegations Australia bugged the Timorese cabinet room to get inside information on the negotiations.

Mr Collaery, who is currently at The Hague as part of his work on the case, told PM that the ASIO agents spent "some hours seizing all manner of documents and other records on the basis that there was a national security issue".

He says the ASIO agents gave his staff no details of their search warrant because it dealt with national security matters.

"I mean how absurd," he said.

"I have no way at this moment of knowing the legal basis upon which these unprecedented actions [took place] - raiding my law offices to procure evidence which is about to go on the table in The Hague."

Attorney-General George Brandis says he approved office raid

ASIO's official response on the raid is that it has "no comment on the matter".

However, Attorney-General George Brandis has released a statement confirming that ASIO executed search warrants in Canberra on Tuesday and took "documents and electronic media" into their possession.

The home and office of lawyer Bernard Collaery ( ABC )

But he says allegations the raid was made in order to affect the arbitration at The Hague "are wrong".

"I confirm that today, ASIO executed search warrants at addresses in Canberra, and documents and electronic media were taken into possession. The warrants were issued by me on the grounds that the documents contained intelligence related to security matters," he said in a statement.

"I have seen reports this evening containing allegations that the warrants were issued in order to affect or impede the current arbitration between Australia and Timor-Leste at The Hague. Those allegations are wrong.

"I have instructed ASIO that the material taken into possession is not under any circumstances to be communicated to those conducting those proceedings on behalf of Australia."

Lawyer says raid an attempt to stymie justice

However, Mr Collaery says the raid is a "blatant, disgraceful attempt" to impede justice being done for East Timor.

Analysis by reporter Peter Lloyd I think we've set sail into very uncharted waters here. Never before has Timor taken someone to this arbitration panel [at The Hague]; never before has Australia been called to answer questions about spying in a forum such as this. And this isn't just about a treaty - this is by implication about the maritime boundary between Australia and East Timor. What's at stake here are issues of sovereignty; it's about billions of dollars in resources; it's about the resource sharing deal that Alexander Downer and the government of the time struck - whether that's valid.

"I left Australia just 24 hours ago. There was ample opportunity, I am sure, for the warrant to be executed and for the attempt to be made whilst I was in Australia and could handle the situation," he said.

"This can only relate to the proceedings against Australia over the bugging of the Timor Leste cabinet offices during the negotiations for a petroleum and gas treaty in 2004, so this is a further step in the actions by Australia to shore up its illegally procured treaty."

Mr Collaery says the seized documents include evidence of Australia inserting listening devices into the wall of the East Timor government's cabinet room ahead of the negotiations.

However, Mr Collaery says he has the evidence with him in The Hague and the raid will do "very little" to hinder East Timor's case.

"The evidence is here. I can't see what the Government hopes to achieve by this aggressive action," he said.

"It can attempt to nullify the whistleblower's evidence, but that evidence has flown - the evidence is here, it's abroad, it's ready."

Space to play or pause, M to mute, left and right arrows to seek, up and down arrows for volume. Listen Duration: 13 minutes 6 seconds 13 m Listen to the interview with Bernard Collaery Download 6 MB

But he says the raid may act as a measure of intimidation against anyone else who wanted to come forward against the Australian Government.

"What it may of course do is restrict the flow of evidence; it may impede others to come forward who were unfortunately pressed into the service of the minister at the time, Alexander Downer, to effect this bugging operation," he said.

ASIS whistleblower detained and questioned

Father Frank Brennan, a Professor of law at the Australian Catholic University, says a retired ASIS agent who is a key whistleblower in East Timor's case was detained and questioned.

"A retired ASIS agent, he and his wife were detained and he was questioned for some time," he said.

"Whether or not he was arrested - I am not apprised of that information. But I can tell you that on Thursday these proceedings were to begin at the Hague with the arbitration, and the understanding was that the parties were to determine how to deal with the witnesses, particularly this key whistleblower.

"The allegation of the Timorese being that this whistleblower is able to provide credible, direct evidence of the bugging of the cabinet room, and that that was done for commercial gain and would require the approval not only of the director-general of intelligence but of the requisite Australian minister."

Mr Downer was the foreign minister at the time the treaty was sealed in 2006.

In a statement to the ABC, Mr Downer says the allegations are old and he will not comment on matters regarding national security.

Documents reveal ASIS's 'elaborate' bugging plan

Mr Collaery says documents seized in the raid show ASIS undertook an elaborate cover operation using Australian aid organisations to bug the office of East Timor's prime minister and senior staff.

"This was a bugging operation on sovereign Timor territory in the face of a treaty already signed that said Australia and Timor will negotiate in good faith," he said.

"This was a commercially designed conspiracy in Canberra to bring about a successful result for Australia over a deposit of gas and oil which is minuscule compared with Australia's own reserves."

Last week, the man tipped to be East Timor's next prime minister became the most prominent leader to go public with the accusation against Australia.

Agio Pereira says the bugging took place and it gave Australia a massive advantage.

"Insider trading in Australia is a crime. And when you bug the negotiating team's evaluation of the impact of their negotiations, you do have an advantage," he said last week.

"It's more than unfair, it actually creates incredible disadvantage to the other side and according to international law, the Vienna Convention and the law of treaties, you're supposed to negotiate in good faith.

"It's not about money; it's about sovereignty. It's about certainty, and it's about the future of our future generations. It's very important for Timor."