Britain has expelled Mossad's chief representative in London and has described as “intolerable” the Israeli spy agency's alleged use of British passports to aid the assassination of a senior Hamas operative in Dubai.

The Foreign Secretary, David Milliband, made a special statement in the House of Commons overnight, accusing Israel of a “profound disregard” for Britain and its sovereignty.

"No country or government could stand by in such a situation. I have asked that a member of the embassy of Israel be withdrawn from the UK as a result of this affair and this is taking place," Mr Milliband said.

"The fact that this was done by a country which is a friend, with significant diplomatic, cultural, business and personal ties to the UK, only adds insult to injury."

Mr Milliband refused to identify the diplomat to be expelled or even if he or she was an intelligence officer, but newspapers in London reported that senior Foreign Office sources have confirmed it was Mossad's top representative at the embassy.