The astonishing claim from former Irish justice minister Michael McDowell came weeks after the former Sinn Fein official was shot dead by the Real IRA.
During a meeting with two senior US officials, Mr McDowell claimed Donaldson’s “outing” had been a “clear message” from the British Government.
His remarks are detailed in a confidential cable released by the whistle-blowing website WikiLeaks. It is published on day five of the Belfast Telegraph’s serialisation of the Northern Ireland cables.
The revelation in late 2005 that Donaldson — the former head of administration for Sinn Fein at Stormont — had worked for British intelligence rocked the republican movement.
It was seen as further proof of how the highest echelons of the IRA had been infiltrated by spies for many years.
However, during a meeting with then US ambassador James Kenny and Special Envoy Mitchell Reiss in May 2005, Mr McDowell said he believed there was another, more important agent.
“McDowell believed that the outing of Denis Donaldson as an informant was a clear message from the British Government that it had another, more valuable, source of information within the republican leadership,” the cable reported.
Three months later, in March 2006, Donaldson was tracked down to an isolated cottage near Glenties in Co Donegal.
The following month he was found shot dead inside the building.
In a separate meeting with Taoiseach Bertie Ahern, ambassador Kenny and Mr Reiss were told how Sinn Fein had seemed “surprised and shaken” by the Donaldson murder.
The cable said the party had supported calls for the re-establishment of Stormont — which was still suspended over allegations of a republican spy-ring — even more strongly as a result.
A post mortem later revealed Donaldson had died from a shotgun blast to the chest.
No-one has been charged in connection with his murder but the Garda investigation remains open.
In February 2009 gardai announced they had a new lead in the inquiry and, later in the year, the Real IRA claimed responsibility for his killing.
Two months ago, two men were arrested for questioning over withholding information about the murder. The pair were held at Letterkenny garda station and questioned before being released without charge.
Donaldson’s family had earlier raised concerns about the PSNI and Garda investigation into the murder, saying more could be done to probe the circumstances surrounding his death.
The family had previously issued a statement saying they did not believe that the Provisional IRA was responsible.
Among those under the Garda spotlight have been associates of republicans ‘shopped’ by Donaldson, maverick republicans who might have targeted him for personal reasons or those hard-liners who believe in killing all spies.
