The family of an American missing for almost seven years, revealed to have been engaged on a rogue CIA mission in Iran, berated the US government for failing to do enough to secure his release on Friday and called on the Obama administration to “step up and take care of one of its own”.

A day after the Associated Press dropped the bombshell news that Robert Levinson, officially America’s longest-held hostage, was working for the CIA when he went missing in Iran in 2007, the reverberations were being felt across political and intelligence circles. CIA veterans expressed astonishment at the off-the-books operation, and one by one, media organisations disclosed they had known about the story for years, but had acceded to government requests not to publish it.

Despite the torrent of revelations, the White House attempted to keep a lid on the story. Jay Carney, the White House press secretary, told reporters: “I cannot comment further on what he may or may not have been doing in Iran.”

Levinson’s family, through a spokesman, expressed initial anger at the decision of AP to go ahead with publication, but later said that as a result of the silence being broken they would now go public with what they knew. In a statement, the family lambasted the US government for failing “to make saving this good man’s life the priority it should be”.

According to the Associated Press, Levinson was brought on to a contract by the CIA in 2006, owing to his expertise in tracking illicit funds after a 28-year career at the FBI and with the Drug Enforcement Agency. His contract was with CIA analysts, who are not authorised to conduct intelligence operations.

Yet Levinson, who had been a private investigator since retiring from government work, preferred to gather intelligence, and did so in several Latin American countries for the CIA. He submitted reports to the private email and home address of a friend at the CIA, Anne Jablonski, evidently to conceal the extent of his intelligence work.

In 2007, Levinson told Jablonski that he was investigating corruption in the Iranian government – information that could be valuable for the CIA – and would travel to the region to meet with a contact. On 8 March, he landed on Kish Island, off the Iranian coast, to meet the contact, Dawud Salahuddin. Levinson checked out of a hotel the following day, and disappeared. Jablonksi reported later that she vomited in a bathroom when she heard the news.

In the fallout from the botched mission, the CIA undertook a reappraisal of the rules governing the running of agents. Ten people were disciplined and three analysts were dismissed. The CIA also eventually accepted that it was responsible for Levinson in Iran, and the government paid $2.5m to his family, reports said. He has a wife and seven children.

While the White House accused AP of being irresponsible in breaking the silence, questions were being asked about why the CIA initially denied any involvement in closed-door sessions with Congress. The AP said that CIA investigators believe they were not initially told the full story by the analysts most closely involved.

Even when officials learned of the true story, the Bush and the Obama administrations continued to claim publicly that the former FBI agent was on a private “business trip” to Kish Island at the time he disappeared, apparently in an attempt not to blow his cover with whoever had captured him.

The extraordinary details were revealed for the first time on Thursday night by the Associated Press and the Washington Post, which both said they had known about them for years. On Friday, ABC News said it had also known about Levinson's CIA connections, and the New York Times published a deeply reported article. The Times disclosed that it had learned about Levinson's CIA ties in late 2007, just a few months after his March disappearance, but had kept quiet for fear of putting his life in jeopardy.

In Iran, the state news agencies reported the revelations but, unusually for a story of such scale, did not devote significant coverage to it. “A new scandal for the US: the American who went missing in Iran was a CIA spy,” said the headline of an article published by the semi-official Mehr news agency.

Ali Alizadeh, a London-based seasoned Iranian analyst and commentator, said Iranian media avoided a big focus on AP's investigation because it could make Iran look weak, but added that the revelations could in fact pave the ways for Levinson's release were he still in the custody of Iran.

“The admission that he was indeed working for the CIA somehow legitimises Iranian claims in recent years that Americans had been involved inside Iran and gives some credibility to Iran,” he said. “This is why I believe it might open ways for his release if he is in fact still alive.”

The revelations caused consternation among CIA veterans. “Since the mid-90s, the agency has recognized that having analysts more involved in operational decisions and choices is a good thing, and enhances the finished product,” said Vicki Divoll, a former CIA lawyer. “However, if analysts get too far out in front, without the training necessary to successfully run operations, this could backfire. And a debacle such as this, if true, may set back internal agency co-operation 20 years."

It is not known whether Levinson, 65, is still alive. He was last heard of about three years ago when the family received a video of him and pictures of him dressed in a Guantánamo-style orange jump suit.

In the video he pleaded for help, saying “Please help me get home. Thirty-three years of service to the United States deserves something.”