Sir Mark Thatcher became an informer to the South African secret services in an attempt to avoid prosecution for his role in a botched coup in central Africa.
Thatcher met South African intelligence officials in 2004 to discuss the attempted coup in Equatorial Guinea.
"I was told I was a nominated SASS [South African Secret Service] source," he said later in an interview.
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The disclosure will further anger Simon Mann, the mercenary released last week by Equatorial Guinea. Mann has claimed the former prime minister's son played a key role and wants him to face justice.
Thatcher met an intelligence official from SASS while he was under investigation by the police for partly financing the plot. The next day he claimed he was told he had been accepted as an intelligence source.
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Four days later he was arrested by the Scorpions, then an anti-corruption unit in South Africa, and subsequently charged under anti-mercenary laws.
Adam Roberts, an Economist journalist and author of The Wonga Coup, a book about the plot, said: "Thatcher told me that four days before his arrest he had been accepted as an intelligence source by SASS. He blames his arrest on a lack of communication between various government departments."
Thatcher now denies trying to strike a deal and says he has "no recollection" of telling Roberts that he had been accepted as an intelligence source. He claims he did not realise the man he met was an intelligence official and at that time he did not believe he faced the risk of prosecution.
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The Equatorial Guinea government said it had evidence - including phone and bank records - that Thatcher and a Lebanese businessman, Ely Calil, were involved in the plot.