A former spy who exposed an Australian bugging operation against East Timor and the lawyer who represented him have been charged with criminal offences, independent MP Andrew Wilkie claimed in Parliament.

Mr Wilkie told Parliament’s Federation Chamber on Thursday that the former spy, known as Witness K, and his lawyer Bernard Collaery, have been charged by the Commonwealth Director of Public Prosecutions.

The former intelligence analyst told Parliament it was an “insane development”.

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"With the diplomacy out of the way it's time to bury the bodies," he said. "This government wants to turn the former ASIS officer and his lawyer into criminals."

Mr Collaery, a former ACT Attorney-General, told a press conference that he has been charged for breaching the Intelligence Services Act over his working relationship with Witness K.

“I'm charged with breaching section 39 of the Intelligence Services Act 2001, that says that anyone who works for ASIS is an agent of ASIS ... [and] must not mention any matters relating to ASIS publicly,” he said. “It's a sad moment in the history of a country I love.”

He said he will shortly leave the country to prepare his defence.

Mr Collaery’s client is only known as Witness K, a spy who revealed the Australian government bugged the East Timorese ministerial offices in 2004 during oil and gas treaty negotiations.

Witness K was supposed to give evidence at the Permanent Court of Arbitration in the Hague but was unable to leave Australia because his passport was seized in 2012.

East Timor dropped the spy case against Australia last year as an act of goodwill ahead of signing a new resources treaty.

“When does reporting a crime become a crime?” Mr Collaery asked. “It's a personal attack on a patriot Australian who can't speak here today.”

He said he will appear in court for a directions hearing late next month.

A breach of section 39 of the Act carries a penalty of up to a decade imprisonment.

However, Mr Collaery says he only faces up to two years in jail because that was the penalty at the time of the alleged offence.