Alexander Litvinenko began his patriotic career volunteering for the Red Army straight out of school in 1979. By the time the Soviet Union collapsed in 1991, the KGB had plucked him from the ranks and set him to work as an operative detective. He was 29. Litvinenko first served in counterterrorism in the mid-90s, then began infiltrating the criminal gangs that flourished in the chaos of the new Russia.

Litvinenko, according to former colleagues and commanders, was a workaday spy. His modus operandi was to stride into a scenario, bang heads together and wait for the fallout. He hoovered up everything that came his way, leaving analysts to sort the truth from the lies. He was, like many agents in Kontora - or "the company", as they called the KGB and its successor, the FSB - secretive, solitary and vain. Litvinenko was expected to be capable of violence in his job, but Marina, who had married him in 1994, despite her fears about the secret services, told us the Sasha she knew was gentle, straightforward and passionate.

Those who served with Colonel Litvinenko also recall that he was naive - a flaw in his line of work. For him, there was only right and wrong. "He was like a salmon swimming upstream," one former FSB general told us, citing how Litvinenko, against his advice, investigated links between crime clans and what Russians had come to know as the siloviki - a group of strongmen within the Kremlin whose core members came from St Petersburg with a background in the intelligence services. Their mentor was Vladimir Putin, a former KGB agent who became head of the FSB in 1998 and president the following year.

Litvinenko was quickly smacked down for his intrusion. He was transferred to a highly secretive FSB unit that carried out hits on criminals and terrorists. Litvinenko was incensed when he learned that his first target was to be Boris Berezovsky, one of the country's oligarchs who had taken an outspoken stand against the siloviki

In November 1998, Litvinenko staged a press conference in Moscow, in which he exposed the Berezovsky plot, fuelling a firestorm in the Russian parliament. Within days he was under investigation. Within weeks he found himself in prison. His allies contrived his release in December 1999, but by the summer of 2000 they were urging him to flee or face a lifetime in a political gulag.

Berezovsky had already installed himself in London and was busy sponsoring every enemy of Putin who crossed his path. He owed a debt of gratitude to Litvinenko and, in November 2000, he arranged for him, Marina and their son, Anatoly, to escape from Russia, sending Alex Goldfarb, a Russian émigré and pro-democracy campaigner, to escort the family to London.

Litvinenko assumed he would be feted in the west. He looked to the experiences of other leading exiles, including Oleg Gordievsky, the far more senior former KGB London station chief and an old friend, who had been embraced by the British authorities when he defected in 1985.

However, Litvinenko was no Gordievsky, and by the time he fled, America and Britain were awash with former KGB agents. He tried to punt his knowledge to private security companies - about crime bosses in Moscow, about who was bent in Russian politics. No one was interested. Instead, he was kept afloat by Berezovsky, who set him up in a house in the north London suburb of Muswell Hill, paid his son's school fees and gave Litvinenko a stipend of £4,000 a month.

In exile, Litvinenko carried on relentlessly truffling for dirt on Putin, but having to live on handouts from Berezovsky niggled at his pride. While his wife, Marina, embraced her new life in the UK, re-establishing a career as a dance teacher and learning English, Litvinenko, who spoke hardly any, hankered after independence. He needed other sources of income and new outlets for his investigative skills - he found them in Italy and they may have led to his murder.

When Litvinenko was poisoned with polonium, a rare and deadly nuclear isotope, as he sat sipping tea at a London hotel in November 2006, the finger of suspicion pointed to the Kremlin. In a deathbed statement, Litvinenko blamed Putin, and the trail of radiation from the polonium - leading across London and all the way to Russia - quickly convinced detectives from Scotland Yard's anti-terrorism squad that the culprit was a former FSB officer, Andrei Lugovoi.

The crime was fixed in the west's collective imagination as a Putin plot to snuff out a brave dissident, a whistleblower who had stood up to the dark forces emanating from the Kremlin. But this was a theory, implicating the highest levels of the Russian government, that the British government did not want to pursue. Simply seeking to extradite the prime suspect - Lugovoi - has thrown London into a furious row with Moscow, resulting in tit-for-tat expulsions of diplomats, restrictions on visas for Russian officials and attempts by Russia to close down two British Council offices. Wary of Russia withdrawing its patronage from Britain altogether - a considerable blow to the City, where Russian deposits amount to £50bn - the British government has been reluctant to take anything other than the narrowest view of the case.

An inquest might delve deeper for evidence, but there seems little prospect of that at the moment. Although Scotland Yard says its investigation was completed last May, with the director of public prosecutions recommending that Lugovoi be extradited and charged, the St Pancras coroner's office, which covers University College Hospital where Litvinenko died, told us that no inquest could be held since - in their view - the police investigation remains open. So large chunks of evidence about Litvinenko's activities remain unexplored. Goldfarb told us: "It could hang like this for years. Marina is very frustrated."

If Scotland Yard have been restricted in their investigations, the Italian security services have no such inhibition - and felt able to show us the results of their inquiries. They were watching Litvinenko long before he came under scrutiny in London, and gathered a vast dossier of material on him, including phone tap transcripts, affidavits, photographs and emails, court depositions and police interrogations; it charts how, driven by money worries, Litvinenko had been secretly cultivating a new project in Italy.

It began in December 2003 when Litvinenko had a call from Mario Scaramella, 34, a silver-tongued opportunist from a wealthy Neapolitan family who was seeking his help. Scaramella was the last person to have a meal with Litvinenko, at the Itsu restaurant in Piccadilly on November 1 2006, a few hours before the former spy was poisoned.

In 2003, Scaramella was working for a government body, known as the Mitrokhin Commission, that had been formed two years earlier by prime minister Silvio Berlusconi ostensibly to discover if senior figures in the Italian establishment had been in the pay of the KGB - in reality a vehicle for smearing Berlusconi's socialist enemies.

Litvinenko knew this from the start but still jumped at the chance. The commission was a meal ticket and would enable him to see more of his brother, Maxim, who had fled Russia before him and was living in Senigallia, a small Italian port on the Adriatic coast. Litvinenko's only concern was about the value of the information he had to bring to the table. In the FSB, he'd had no connection with the foreign wing and no knowledge of its network of recruits in abroad, the people who were to be the focus of the commission.

To back him up, he took along a new contact he had made through the Berezovsky circle, Evgeni Limarev, also a Russian exile, who lived in France and was the son of a high-ranking KGB officer.

The Italian files reveal how Scaramella and Litvinenko worked hand-in-glove for three years as the prime movers in the commission that would publicly smear Italy's leftwing statesmen. Any evidence would do, both fact and fiction. When that failed to gain traction, Litvinenko began dredging Italy's underworld, which had links with the Russian and Ukrainian criminal clans, which in turn had powerful connections in the Kremlin. Through them, Litvinenko and Scaramella hoped to find new evidence of the links between the Italian left and the KGB. They were making dangerous enemies.

Litvinenko had no compunction in recalling a piece of gossip he had been told by a former KGB deputy director as he fled Russia. In 2000, General Anatoly Trofimov had warned Litvinenko not to go to Rome since "Prodi is our man in Italy". He was referring to Romano Prodi, the former Italian prime minister who went on to become president of the European Commission.

Now Litvinenko regurgitated the unfounded claim to Scaramella who persuaded him to write it down. It may have been no more than KGB tittle-tattle, but written in Russian by a former KGB colonel, it became evidence - exactly what Berlusconi needed at a time when Prodi was gearing up for a return to Italian politics.

By the summer of 2004, Limarev and Litvineko were flying to Naples or Rome on a monthly basis, touted around town by Scaramella as his "KGB colonels". Limarev, who today lives in the French Alps and continues to work as a security consultant, told us, "Each day Mario [Scaramella] would come to the hotel with a procession of SUVs. When he passed, everyone bowed to him. We would whirl around parties and official functions, shaking hands."

Besides Prodi, potential targets on their list included former communist prime minister Massimo D'Alema; Alfonso Pecoraro Scanio, Green party leader; the then head of intelligence; a couple of judges; two reporters from La Repubblica; a dozen politicians and officials connected to Italian military intelligence; and a clutch of former defence ministers.

Others outside Italy had become interested in their work, too. The Bush administration and the Berlusconi government were close allies over Iraq and the war on terror; the last thing Washington wanted was the left to regain power in Italy after the elections of 2006. Litvinenko, Limarev and Scaramella were introduced to Robert Seldon Lady, a political officer at the US consulate in Milan - an undercover CIA agent. When Lady got into trouble in Italy, it was Litvinenko and the Mitrokhin Commission who tried to dig him out.

In 2004, the Italian authorities issued an arrest warrant for Lady, accusing him of "rendering" an imam to Egypt, where he was tortured as a terror suspect. Lady went into hiding, and the Mitrokhin Commission began investigating allegations that the prosecutor in the Lady case, Armando Spataro, had secret links to the KGB. In a similar tactic, two Italian journalists who reported that the CIA's Rome station chief had been complicit in creating the story about Saddam Hussein buying uranium from Niger, were branded FSB dupes by the Mitrokhin Commission. A consultant on the commission, Gianni Paolo Pelizzaro, recalls: "Scaramella and his KGB colonels did a lot of things using the name of the commission they should not have."

Limarev says it was around then that he backed away from involvement with the other two. Meanwhile, Litvinenko's trips to Italy grew more frequent. "With his consent, Berezovsky had cut back his stipend and he was preparing to go it alone," Goldfarb says. "I asked him what he was up to and [Litvinenko] said, 'I am consulting. I have business projects.' We had no idea what he was doing in Italy." Marina, who had always stayed out of her husband's work, says she did not even ask him which country he was going to during his frequent trips abroad.

According to Pelizzaro, Litvinenko "was giving Scaramella lots of information about Russian and criminal infiltrations in Italy, but most of it was very difficult to verify and crosscheck. It was a little bit out on a limb." In the old days, Litvinenko had been familiar with criminal clans in Russsia, now he was making risky approaches to the Italian mafia. Scaramella believed if they could get inside this network, they would be able to leverage much more damaging intelligence about Italian politicians.

They spread their net wider. The Litvinenko dossier lists a dizzying roll call of names investigated by the pair, among them Semion Mogilevich, the darkest figure in Russian organised crime - a notorious Ukrainian whose network extended from Kiev to Naples. Mogilevich, a striking man at barely 5ft 6in and more than 20 stone, has a portfolio that includes private banks, financing the sale of enriched uranium and laundering his money through companies listed on the New York stock exchange. He was already on the FBI's wanted list but, according to Litvinenko's sources, had extensive links to Putin's government.

Taking on Mogilevich, who runs a private army of brutal killers, was a huge risk for a civilian outfit such as the Mitrokhin Commission, and Litvinenko soon picked up word that he was enraging the Ukrainian's siloviki friends in Moscow. In autumn 2005, he made a tape recording in London, expressing his concern: "I gave a lot of information about Mogilevich to Scaramella. Now I know Russian special services are very afraid that this commission will uncover information about its agents in Italy. The Russian embassy asked for my brother to be extradited so he could be prosecuted back in Russia. It is blackmail against me to stop me working with Scaramella."

But Litvinenko would not back off. In October 2005, he claimed to have uncovered an FSB agent hiding in Naples, a man he believed had been in deep cover since 1999. This FSB agent was Ukrainian by birth and, according to Litvinenko, he had strong links to Mogilevich's mob. His name was Alexander Talik, he was born in 1970 and, according to the Italian dossier and to depositions read out in a subsequent Italian court hearing, had served with the Red Army before being recruited by the FSB, where he rose to the rank of captain.

Talik, at the same hearing, would admit to having served in the FSB until 1977, but denied everything else. He said Scaramella had tried to strong-arm him into providing information to the commission on Mogilevich and Ukrainian criminals based in Italy. When he refused, the court heard, Litvinenko and Scaramella resorted to fabrication: they tried to frame Talik as part of a criminal conspiracy, hoping this would persuade him to cooperate.

In accordance with their alleged plan, Litvinenko sent Scaramella a fax in October 2005 warning him of a Russian security services operation to kill Litvinenko's brother, Maxim, Scaramella and a political associate of Berlusconi's. The detail of the plot was bizarre: a white transit van with Ukrainian numberplates, apparently en route from Kiev to Naples, was carrying a consignment of grenades, hidden inside hollowed-out bibles, to be used to mount attacks on the three men. The alleged recipient and hit man was Talik.

Litvinenko and his brother reported the threat to the local police in Senigallia. Scaramella reported the plot to the police in Rome. A police patrol in Abruzzo did indeed discover two white vans with Ukrainian numberplates and a concealed shipment of grenades. Six Ukrainians were arrested and charged with smuggling arms.

At Litvinenko's suggestion, Scaramella also gave police the name of the FSB officer in Moscow who they said was managing Talik. Still nothing happened. Police in fact had their doubts about Scaramella - the details he provided about the vans' progress seemed just too precise.

In November, Litvinenko took matters into his own hands and "revealed" the entire plot to the Ukrainian media, including Talik's name. The Italian authorities, by now suspicious of the Mitrokhin Commission, Scaramella and Litvinenko, had begun recording their phone calls. One tap caught Litvinenko crowing to Scaramella, "All the Ukrainian newspapers have published and all the Ukrainian citizens know about Talik and the plot. I also indicated that Talik has been arrested."

In fact, Talik had not been arrested, and evidence presented at a later court hearing suggested he was in a mood for revenge. A phone tap, played to Talik in court, captures his reaction. "Complete bullshit has been written about me," he complains. "Litvinenko has blamed me for organising arms shipments from the Ukraine." More chillingly, he continues, "I've asked for the address of this arsehole in London and I've given a dossier to Vitalich who will take everything to Moscow." Asked by the person on the line who Vitalich was, Talik refuses to explain, insisting only that Vitalich would pass on this contract on Litvinenko's life to three powerful sponsors, all siloviki

In court, Talik admitted making the call - but the reference to Litvinenko was merely an idle threat, he said. He denied accusations that he had high-ranking contacts both in the Ukrainian mafia and in the Kremlin and said he had been enraged by Litvinenko's outing of him as an FSB agent to the Ukrainian media.

The Italian police initially took seriously the threat caught on the phone tap; but, given that they now were also convinced Litvinenko and Scaramella had tried to frame Talik, they alerted no one. The police also began probing how Talik had stayed in Italy for six years with no visa. By February 2006, nine months before Litvinenko was poisoned, they had assembled a 73-page dossier on him.

Litvinenko and Scaramella continued to work together, repeating the Prodi allegations, this time on camera. The slur reached new ears. Gerald Batten, a British MEP from the UK Independence party, picked up on it and met Litvinenko on March 29 at Itsu, the Russian's regular haunt. Four days later Batten demanded an inquiry into Prodi at the European Parliament. The story caused uproar in Italy. The Italian general election was imminent - Prodi threatened to sue Litvinenko and Scaramella. Berlusconi, instead of achieving a strike against the left, was forced by parliament to wind up the Mitrokhin Commission. A few days later Prodi was returned to power.

Scaramella was out of a job. Litvinenko, too. Oblivious to the inquiries going on into the supposed contract on his life, he was busy looking elsewhere for a lucrative new collaboration.

In January 2006, Litvinenko had attended Boris Berezovsky's lavish 60th birthday party at Blenheim Palace, where he met a ghost from the past. He was seated on the same table as Andrei Lugovoi, a former FSB agent whom he had known in Moscow during the 90s. Lugovoi had gone on to serve 14 months in prison, for helping a Berezovsky business partner evade prosecution. He told Litvinenko that since getting out he had become a multimillionaire, running a private security agency that provided bodyguards to rich Muscovites.

Litvinenko should have been wary of Lugovoi from the start, but the lure of money was too strong. Otherwise he might have found out that Lugovoi was a close associate of Alexander Talik; the two men served together in the same KGB and FSB divisions. Instead, Litvinenko confided to his good friend Alex Goldfarb that he had agreed to become Lugovoi's "man in London".

Others warned him to be careful, including Evgeni Limarev. Limarev was to play one last significant role in the Litvinenko affair: he sent a series of alarmist emails to Scaramella in October 2006, claiming that a Russian plot was afoot to kill everyone connected to the Mitrokhin Commission. He was not referring to the alleged Talik hit, but to another that had no independent verification. The messages sent Scaramella running to Litvinenko in London, who reluctantly agreed to meet him on November 1 2006. A series of witness statements Scaramella would later make to anti-terrorism detectives at Scotland Yard, which we have seen, give an account of this last meeting.

Scaramella picked up a final email from Limarev at an internet cafe in Soho just minutes before he met Litvinenko, as usual in Itsu. But Litvinenko was dismissive of Limarev's warnings. Scaramella told British detectives: "Litvinenko was adamant, 'It's pure shit, Mario. Don't worry,' he told me. 'As soon as I get home, I'll make some verifications through my contacts in Moscow.' "

They arranged to speak again the next morning. But when Scaramella called, Marina answered the phone. "She said Alexander was very sick, puking," Scaramella told police. The following day he rang again, only to be told Litvinenko was on his way to hospital. Paranoid, Scaramella scribbled down a note and hid it in his wallet. "It contained details about my closest relatives and advice that if something happened to me, it was necessary to inform the police," he said. As Scaramella flew back to Naples, he sent Litvinenko an email. "I made comments about the timing of his sickness and reminded him about the names mentioned by Limarev." There was no reply. But after he read in the newspapers that Litvinenko was critically ill and had probably been poisoned, he tried calling one more time, on November 17. Litvinenko, who had just been transferred to University College Hospital under armed guard, answered his mobile phone. Scaramella told police: "I said: 'It's Mario, how are you?' He said, 'I'm sick, very sick. Sorry, I can't speak.' " Six days later, Litvinenko was dead.

Scaramella was a mess. As he tried to deal with a sickening fear that he was about to be killed, too, the Italian authorities moved on the grenades-in-bibles plot. Five days after Litvinenko's death, the Italian police's specialist operations division raided Talik's Naples apartment. He was driven to Rome and questioned. The transcript reveals that rather than explore the alleged threat, or Talik's connections with Lugovoi, the police had a new agenda - gathering evidence against Scaramella.

Scaramella was arrested on December 24 and charged with "calumny", or criminal lying, against Talik. A few months later he was also charged with weapons smuggling. The trial of the six Ukrainians who had been arrested with the grenades, and who had been in custody since October 2005, collapsed for lack of evidence.

In September 2007, after nine months in police custody, Scaramella was placed under house arrest at his family's villa near Gaeta, a seaside town north of Naples. He denies the charges. His only link with the outside world is his father, Amedeo, who agreed to meet us at his lawyer's office overlooking the Bay of Naples. "While my son and I were in London assisting your police in December 2006," Amedeo said, "the police here broke the doors of all of our houses. When we returned to Italy, Mario was locked in a solitary cell, two metres wide, for 45 days. We kept asking, 'Why are you arresting my son?' Why had they taken 13 months to arrest Talik, only to release him straight away? There has been a deeply political aspect to my son's case."

In Britain, Litvinenko would be portrayed as a freedom-loving, pro-western martyr, granted political asylum in 2001, but in Italy he had become foolishly wrapped up in a rightist plot and his death was quietly celebrated.

Maxim Litvinenko remains in Senigallia. Even though he accused Talik of plotting to kill him back in October 2005, he now claims never to have heard of the FSB agent. "I know nothing. Who is Talik? I don't know what you are talking about," he said.

Talik lives freely in a grimy Naples quarter, where our taxi driver does not want to go. "You walk," he says, speeding off.

Through narrow streets darkened by parachutes of laundry overhead, we press on to an apartment with no windows. We knock. Locks are drawn back and an ashen face peers out. It is Nataliya, Talik's wife, a child holding on to her leg. Can we speak to her husband, we ask.

She stares mutely. We need to talk to him about Litvinenko, we say. A look of incredulity spreads across her face. "Who told you how to find us?" she screams, slamming shut the huge iron door. We can hear her running upstairs, screaming for her husband. And we back out of the one-way street.