"[Zygier] may well have been about to blow the whistle, but he never got the chance," an Australian security official with knowledge of the case told Fairfax Media yesterday.

Sources in Canberra are insistent that the Australian Security Intelligence Organisation (ASIO) was not informed by its Israeli counterparts of the precise nature of the espionage allegations against Mr Zygier. However, it is understood that the former Melbourne law graduate had been in contact with Australian intelligence.

Israeli intelligence informed ASIO of his arrest and detention just eight days after authorities in Dubai had revealed that suspected Israeli agents had used fraudulent Australian passports in the assassination of a Palestinian militant leader.

The consequent crisis in Australian-Israeli intelligence relations provided the context in which the Australian diplomats did not seek consular access to Mr Ziegler, who was regarded by Australian security officials as being a potential whistleblower on Israeli intelligence operations.

Foreign Minister Bob Carr and the Department of Foreign Affairs and Trade (DFAT) on Thursday revealed that the Australian government first learnt of Mr Zygier's detention through ''intelligence channels'' on February 24, 2010.

''The Australian government was informed in February 2010 through intelligence channels that the Israeli authorities had detained a dual Australian-Israeli citizen - and they provided the name of the citizen - in relation to serious offences under Israeli national security legislation,'' Senator Carr told a Senate hearing.

Fairfax Media has been told by informed security sources that ASIO's liaison office in Tel Aviv was notified of Mr Zygier's detention by the Israeli domestic intelligence agency Shin Bet. It is understood that ASIO promptly notified the Department of Foreign Affairs and Trade including the Australian ambassador to Israel, Andrea Faulkner.

An interim report to Senator Carr has reportedly advised that Australian intelligence agencies told DFAT officials about Mr Zygier's detention shortly after his arrest in February 2010, however officials were unclear when or whether then foreign minister Stephen Smith was briefed.

The office of Foreign Minister Carr declined to respond when asked on Thursday about the Australian government's precise knowledge of Israeli allegations about Mr Zygier and the reasons for his secret detention. A spokesperson for Senator Carr said that ''the government does not comment on intelligence matters''. So far as anyone knows, Mr Zygier was never charged or tried, despite being detained. As no request for consular assistance was made by Mr Zygier or his family, the matter was left to be dealt with through intelligence liaison channels. No consular contact was made with Mr Zygier, and Australian diplomats did not become involved in the matter until after his reported suicide in prison December 2010.

Mr Zygier's detention came at an increasingly tense time in Australian-Israeli relations.

On February 16, 2010, Dubai authorities publicly revealed that suspected Israeli agents had used Western passports in a covert operation that resulted in the assassination of Hamas leader Mahmoud Al-Mabhouh in the United Arab Emirates. The Dubai police investigators sought the co-operation of DFAT and Australian Federal Police which confirmed the fraudulent use of Australian passports.

News of the Israeli passport fraud caused a strong reaction from then prime minister Kevin Rudd. On February 25, according to a United States diplomatic cable published by WikiLeaks, DFAT told the US Embassy in Canberra that ''Australian officials are 'furious' all the way up the chain of command over the incident, and Prime Minister Rudd has vowed to get to the bottom of it.'' Foreign Minister Stephen Smith called a press conference to publicly announce that he had summoned Israel's Ambassador Yuri Rotem to seek an explanation from the Israeli Government. On February 27, three days after the Australian Government learned of Mr Zygier's detention, Fairfax Media reported that at least three Australian-Israeli dual citizens had been under investigation by ASIO in relation to alleged Israeli espionage activity while using Australian passports. One of those people, not named by Fairfax Media at the time, was Mr Zygier. It was not suggested that the Australians under ASIO investigation were linked to the Dubai assassination.

Australia's embassy in Tel Aviv had already complained to Israeli authorities about the passport abuse.

Australian Federal Police investigators subsequently travelled to Israel to pursue the Dubai passport fraud case, and that was followed by a visit to Tel Aviv by ASIO Director-General David Irvine, who met with Israeli intelligence chiefs. Mr Irvine subsequently provided a classified report to the government on the issue.

However security sources have told Fairfax Media that the ASIO Director-General did not raise the case of Mr Zygier.

Senator Carr yesterday told a Senate hearing that the Australian government sought ''specific assurances'' that Mr Zygier's legal rights would be respected and that ''the Israeli government responded that the individual would be treated in accordance with his lawful rights as an Israeli citizen. The government relied on these assurances.'' DFAT yesterday declined to provide details of these exchanges.

On May 24, 2010, Foreign Minister Smith told Federal Parliament that the Australian Government was ''in no doubt that Israel was responsible for the abuse and counterfeiting of [Australian] passports''' in Dubai and announced that a senior unnamed Israeli diplomat was being expelled.

The expelled diplomat, given one week to leave Australia was Israeli Embassy counsellor Eli Elkoubi, an officer of the Israeli foreign intelligence service, Mossad. Israeli diplomats complained privately after Mr Elkoubi's name and status as an intelligence officer was published in The Canberra Times in June 2010. Although the Australian Government did not deliberately reveal Mr Elkoubi's status as a Mossad officer, the Israelis believed the disclosure of his name and role was a further act of retaliation.

Security sources have told Fairfax Media that the consequent freeze of Australian -Israeli intelligence cooperation meant that Zygier's case wasn't pursued further by either ASIO or the Department of Foreign Affairs and Trade before his death while in secret detention in December 2010.