Footage has emerged showing an undercover police officer tasked with monitoring so-called "domestic extremists" running around Leeds city centre dressed as a clown.

The video of Lynn Watson, who lived as an environmental activist in Leeds for five years, shows her wiggling her bottom outside an MP's office, playing cricket with a feather duster and chanting "tickle the tree".

The images from the good-natured anti-war protest are likely to further undermine claims by police chiefs that their multimillion-pound operation to deploy spies against activists has been proportionate.

The operation has been carried out by a secretive unit belonging to the Association of Chief Police Officers. Today the acting commissioner of the Metropolitan police, Tim Godwin, said his force would take over the spy agency - the National Public Order Intelligence Unit - on Monday. It will come under the Met's counter-terrorism command.

There are now three formal inquiries into undercover policing prompted by revelations in the Guardian about Mark Kennedy, an officer who lived among protesters for seven years.

The Guardian has since identified three more undercover police officers, including Watson, who friends say played a crucial role in organising the first Climate Camp protest in 2005 while living in Leeds.

Senior police officers accept that most environmental campaigners are lawful protesters who cause minimal, if any, disruption. However, they argue that a minority pose a serious threat to the national infrastructure and deserve long-term surveillance.

The footage of Watson, which has been purchased by Channel 4 News and is expected to be broadcast tonight, shows a demonstration in Leeds on 3 July 2004 against the war in Iraq.

Watson, a member of the theatrical collective known as the Clandestine Insurgent Rebel Clown Army, can be seen taking part in a game of "let's play tangle", in which clowns join hands and wrap their arms around each other in a circle.

She is then seen helping to set up what activists refer to as a "clown checkpoint" in the middle of the road. The protest appeared to attract only a small presence of uniformed police officers, some of whom can be seen apparently smirking at the antics.

Confronting the camera, Watson says: "We are checking for clowns, we need more clowns in this country - more clowns."

Another shot shows an activist strumming a guitar while Watson is sat in a tree. She then appears to stroke the tree, adding: "Tickle the tree, tickle the tree."

The person who shot the footage said the activists had targeted a military recruitment office in the centre of Leeds, but were moved on by police. Earlier in the day, they had marched into the MP Hilary Benn's office. The footage shows Watson and the activists bending over in a line to shake their bottoms at the building in unison.

A voice – believed to be a staff member in the constituency office – can be heard saying: "They're friendly enough. There's nothing hostile or threatening about them."