Australian intelligence had detailed knowledge of the case of Prisoner X, the Melbourne man thought to have been an Israeli spy, well before he died in a Tel Aviv jail in 2010, a report said Saturday.

"Every day that goes by you see how deeply involved they were," a senior Israeli official told The Australian newspaper. "It is clear they were in the know long before he died."

The unnamed source told the paper that Australian officials had suspected the man of spying for Israel and had interrogated him, adding "they (the Australians) knew many things".

"Then, when the coffin was returned to Australia, they knew he was not some backpacker who got lost trekking," the official said.