Police chiefs are facing damaging allegations that they authorised undercover officers embedded in protest groups to give false evidence in court in order to protect their undercover status.

Documents seen by the Guardian suggest that an undercover officer concealed his true identity from a court when he was prosecuted alongside a group of protesters for occupying a government office during a demonstration.

From the moment he was arrested, he gave a false name and occupation, maintaining this fiction throughout the entire prosecution, even when he gave evidence under oath to barristers. The officer, Jim Boyling, and his police handlers never revealed to the activists who stood alongside him in court that he was actually an undercover policeman who had penetrated their campaign months earlier under a fake identity.

Boyling was undercover, using the name Jim Sutton, between 1995 and 2000 in the campaign Reclaim the Streets, which organised colourful, nonviolent demonstrations against the overuse of cars, such as blocking roads and holding street parties.

Boyling and the protesters were represented by the same law firm, Bindmans, as they held sensitive discussions to decide how they were going to defend themselves in court. The activists allege that Boyling and his superiors broke the campaigners' fundamental right to hold legally protected consultations with their lawyers and illicitly obtained details of the private discussions.

The fresh allegations triggered another wave of criticism of police chiefs over their infiltration of protest movements, and came on the eve of a major report by Bernard Hogan-Howe, in his previous role at Her Majesty's Inspectorate of Constabulary.

The Guardian has learned that police chiefs have authorised undercover officers to hide their real identities from courts when they have been prosecuted for offences arising out of their deployment.

Peter Black, another police officer who worked with Boyling in the same covert unit penetrating political campaigns, said Boyling's case was not unique. He said from time to time, prosecutions were allowed to go ahead, as this helped to build up their credibility with the activists they were infiltrating.

He added that being prosecuted was "part of their cover", as they were regularly involved in public disorder.

Police chiefs authorised their spies to be prosecuted only for offences that fell short of a jail sentence, according to Black. If a police spy was in danger of being locked up, prosecutions of the officer and the other activists would be "mysteriously dropped", he said.

Alternatively, undercover officers faced with a stretch in jail would disappear, telling activists things were too hot and they were going on the run. They would thereby enhance their reputations among the activists and at the same time solve a difficult problem for their handlers.

Hogan-Howe has been leading an inquiry into the legality and accountability of planting undercover police officers into political groups after revelations about Mark Kennedy, the police spy who spent seven years infiltrating the environmental movement.

So far this year, eight official inquiries have been set up to examine the conduct of police and prosecutors after the exposure of a network of police spies in political movements.

Three court of appeal judges have overturned the convictions of 20 environmental protesters, ruling that crucial evidence recorded by Kennedy was withheld from their original trial. Another trial, of protesters accused of plotting to break into a power station, also had to be abandoned.

Police have been accused of wasting huge sums of public money by spying on protesters pursuing legitimate campaigns. They were also castigated after it was disclosed that Kennedy and other spies had sexual relationships with the activists they were targeting.

One of these spies was Boyling, a serving Metropolitan police officer, who was revealed by the Guardian in January to have married an activist he met while undercover in the environmental protest movement, and to have gone on to have children with her.

In the latest twist to his tale, it is alleged that he maintained the charade of being a committed activist when he was prosecuted in Horseferry Road magistrates court in London in 1997 for disorderly behaviour in a three-day trial.

He was among a group of Reclaim the Streets activists who occupied the office of the chairman of London Transport, which ran the capital's tube and rail system.

Official records show that when he was arrested and taken to Charing Cross police station he told police he was "Pete James Sutton", and that his occupation was "cleaner". He signed to say this was correct on the police forms recording his arrest. The date of birth he gave conflicts with the one on other official records.

Under the fictitious identity, he instructed a solicitor from Bindmans to represent him at the police station and in court, according to the law firm.

Bindmans also represented the other activists as they appeared in court five times between September 1996 and January 1997.

When Boyling went into the witness box at the trial, he swore under oath that he was Sutton, and gave evidence under questioning from the barrister for the defendants and the prosecution, according to a legal note of the hearing.

All but one of the activists were acquitted. John Jordan, the activist who was convicted of assaulting a police officer and given a conditional discharge for a year, has launched an appeal to have his conviction quashed.

Jordan, an art lecturer, also alleges that a police officer involved in the case offered to give favourable evidence in court if he became an informer. Jordan says he refused the offer.

His lawyer, Mike Schwarz from Bindmans, said: "This case raises the most fundamental constitutional issues about the limits of acceptable policing, the sanctity of lawyer-client confidentiality, and the integrity of the criminal justice system. At first sight, it seems that the police have wildly overstepped all recognised boundaries."

The Metropolitan police declined to comment.