The international row over undercover police officer Mark Kennedy escalated tonight after the full scope of his activities were revealed in a secret sitting at the German parliament.

Germany's federal police chief, Jörg Ziercke, was forced to admit to MPs at the Bundestag that not only had Kennedy had a long-term lover in Berlin – in direct violation of a law forbidding police officers to have sexual relationships while undercover – but that he had been invited to Germany by the authorities to infiltrate the anti-fascist movement.

Ziercke also revealed that Kennedy, the Metropolitan police officer at the centre of a controversy over the infiltration of peaceful environmental groups across Europe, worked for three German states during at least five visits to the country between 2004 and 2009.

He said the agent committed at least two crimes, but the cases against him were dropped at the behest of German authorities who knew Kennedy's true identity.

Kennedy first broke the law during protests at Heiligendamm, the town near Rostock where the G8 meetings took place in 2007. He later committed arson, Der Spiegel said, during a demonstration in Berlin at which he set fire to containers.

The revelations are published today in Der Spiegel, which says Kennedy's involvement in criminal activity during his time in Germany highlights concerns that he was working as an agent provocateur and not just an observer of the activists.

In addition, the newspaper says, the fact that investigations into both crimes were shelved suggests police authorities wielded an unacceptable influence over the country's judicial process.

Kennedy spent long periods in Germany and lived with individuals in the "black block" anarchist movement during his time in the country. At the same time, he entered 22 different countries across Europe using a fake passport, including Spain, Italy and Iceland – where he helped found the activist movement.

The revelations about Kennedy's role in Germany came despite the government maintaining its refusal to answer a series of parliamentary questions from opposition politicians.

The Bundestag said "operational reasons" prevented them answering any questions about the country's co-operation with undercover police officers from other countries, and Kennedy in particular.

But Ziercke admitted Kennedy had been hired by police in three German states: Mecklenburg-Vorpommern , where the G8 meeting was taking place, Baden-Württemberg and Berlin.

The agent was working on a contract brokered directly by the German parliament, Der Speigel claims. He was, the newspaper adds, considered to be a "trusted agent" and safe pair of hands by the authorities.

Kennedy, who has already been revealed as having conducted numerous sexual relationships with female activists across Europe, is also revealed to have conducted a long-term, long-distance relationship with a woman living in Berlin.

Such behaviour, said Ziercke, directly contravenes German laws, which forbid undercover agents conducting "tactical love relationships" with those under surveillance. Ziercke went on to acknowledge that Kennedy's behaviour revealed there were obviously "control-deficits" when it comes to foreign undercover officers.