Wen Ho Lee was put in charge of updating computer software for nuclear weapons in the spring of 1997, less than a year after the Federal Bureau of Investigation (FBI) began investigating whether China obtained US secrets during the 1980s that gave it the technology to create miniaturised warheads.

China has denied that it engaged in nuclear espionage.

Lee, a Taiwanese-born American citizen who was qualified for the job, was approved for the Los Alamos post by the FBI, the Times reported, citing unidentified intelligence and law-enforcement officials.

He was promoted to avoid raising his suspicions about the investigation and with the expectation that his telephone conversations would be wiretapped, officials said.

However, the FBI's requests for a secret wiretap were repeatedlydenied by Justice Department officials who believed there were insufficient grounds to obtain court approval for the surveillance.

Lee also was allowed to hire a Chinese national as a research assistant. The assistant, a postgraduate student whose name was not released, was later investigated by the FBI, which did not find any intelligence connection.

It is not known whether the assistant, who was at the University of Pittsburgh on a student visa, was still in the country.

Lee's security clearance was not revoked until late last year. He was fired by the New Mexico lab on March 8, and has taken two polygraph tests. He appeared to pass the first test, but the second found him to be deceptive, officials said.

He has not been charged with any crime. Lee has not been seen publicly, but reportedly has hired a lawyer.