The Russian spy arrests in the US came amid US-Russia efforts to reset ties between the two countries [AFP]

A Russian newspaper has reported that the head of Russia's undercover espionage operations in the United States had worked as a double agent for US authorities to help expose an illegal Russian spy ring that was busted in June.

Kommersant said that Shcherbakov, a colonel of the Foreign Intelligence Service's department, defected to the US days before the US announced the arrests of the 10 spies. 

Gennady Gudkov, a deputy chairman of the Russian parliament's security committee, confirmed the accuracy of the report, saying it was a major failure by Russian intelligence.

"It is a major blow to the image of the Russian intelligence services," he told the Reuters news agency.

"The damage inflicted by Shcherbakov is so enormous that a special commission should be created to analyse the reasons which allowed this complete failure to happen," Gudkov said.

Meanwhile, Mark Stout, a former US intelligence officer, said: "Recruiting a Russian officer who was actually in charge of so-called 'illegal operations' in the US is about as big a counter-espionage success as US intelligence can hope to get."

All the Russian spies, who had been operating in the US for up to 10 years under false identities, pleaded guilty and were deported to Russia in a prisoner swap less than two weeks later.

Kommersant also quoted an unnamed Kremlin official as saying a Russian hit squad was probably already planning to kill Shcherbakov.

"We know who he is and where he is, do not doubt that a Mercader has been sent after him already."

The official was referring to Ramon Mercader, a Russian agent who murdered exiled Bolshevik Leon Trotsky with an ice axe in Mexico in 1940.

The betrayal would make Colonel Shcherbakov one of the most senior turncoats since the fall of the Soviet Union and could have consequences for Russia's proud Foreign Intelligence Service (SVR).

Al Jazeera's Neave Barker, reporting from Moscow, said: "Sherbakov may well in the future find himself the victim of an assassination for betraying Russia. So there are quite chilling consequences for the individual.

"He is an individual who has forced Russia's intelligence agency to rethink the way in which they conduct operations.

"An individual that the Kremlin very much believes is responsible for undermining US-Russia relations at a time when both presidents wanted to restart diplomatic ties."