Criminal charges have been filed against the spy-turned-whistleblower who revealed Australia had bugged East Timor’s cabinet rooms, federal parliament has been told.

Independent MP Andrew Wilkie has used parliamentary privilege to claim the man, known only as Witness K, and his lawyer Bernard Collaery were being targeted.

“The Commonwealth Director of Public Prosecutions has filed criminal charges against Collaery and his client,” he told the lower house on Thursday.

“This is obviously an insane development in its own right.”

Mr Wilkie did not specify the exact nature of the charges. AAP is seeking comment from the CDPP.

Witness K has been denied a passport since 2012 and been unable to leave Australia.

The former Australian Secret Intelligence Service agent was a key witness for East Timor in a case against Australia over allegations Dili’s cabinet rooms were bugged during negotiations over a gas and oil treaty in 2004.

Witness K was supposed to give evidence at the Permanent Court of Arbitration in the Hague but was unable to leave Australia because his passport was seized in 2012.

East Timor dropped the spy case against Australia last year as an act of goodwill ahead of signing a new resources treaty.

“With the diplomacy out of the way it’s time to bury the bodies,” Mr Wilkie told parliament.

“This government wants to turn the former ASIS officer and his lawyer into criminals.”

Mr Collaery last year called for a Senate inquiry into the issue.

The two countries signed the treaty in March, carving up $56 billion in potential revenue from oil and gas reserves in the Timor Sea.

East Timor, one of the world’s most impoverished nations, will reap between 70 to 80 per cent of the revenue from the Greater Sunrise fields under the agreement.