ZWICKAU: A German intelligence agent was at the scene of one of the 10 murders carried out by neo-Nazi terrorists, the domestic security service has confirmed, fuelling speculation that the killers' movements were known to the authorities during their 13 years on the run.

The undercover officer was in an internet cafe in the central city of Kassel in Hessen when a 21-year-old Turk was shot at point blank range on 6 April 2006, a spokesman for the Hessen branch of the Office for the Protection of the Constitution (BfV) said on Tuesday.

The admission has added yet more controversy to an already contentious case, which the chancellor, Angela Merkel, has described as “mortifying” for Germany.

The investigation into the activities of the so-called National Socialist Underground was broadened on Tuesday to take in previously unsolved crimes across the country, amid fears that a network of supporters may have helped them carry out further attacks.

These include suspected terror attacks in Cologne and Dusseldorf from 2000 to 2004 that injured more than 30 people, most of them foreigners, and the attempted 2008 murder of a Bavarian police chief who was stabbed by a masked assailant who yelled: “Greetings from the national resistance!”.

Critics say German authorities have played down the existence of rightwing extremism, concentrating instead on the threats posed by leftwing terrorists and Islamic fundamentalists. Whether they deliberately turned a blind eye or genuinely did not have a handle on the violence being wrought by neo-Nazis is open to interpretation.

Authorities in the state of Thuringia, where the three key members of the terror cell all come from, admit they have 24 ringbinders full of intelligence on the trio.

“The intelligence service has completely failed,” said Hans-Christian Strobele, a member of the parliamentary committee which monitors Germany's secret service agencies, following an emergency meeting on Tuesday. “It's probably the biggest secret service cock-up since German reunification,” said the Berliner Zeitung newspaper in an editorial.

The scandal has gripped Germany for days as the country struggles to understand how the rightwing terror cell managed to evade capture for so long despite being apparently responsible for 10 murders, including the death of a policewoman, at least 14 bank robberies and two vicious nail bomb attacks between 2000 and 2007. The group has been dubbed the Brown Army Faction, a reference to the Red Army Faction — also known as the Baader Meinhof gang, a leftwing terrorist group that committed a series of murders in the 1970s and 80s. In Germany, brown remains a colour inextricably linked with the Nazi uniform.

The case came to light earlier this month when two known neo-Nazis, Uwe Mundlos, 38, and Uwe Bohnhardt, 34, were found shot dead in a burnt out campervan in what appeared to be a twin suicide pact. Hours later, their flat in the quiet suburbs of the east German town of Zwickau was blown up, an explosion detonated by alleged accomplice Beate Zschape, 36, who turned herself into police days later.

When investigators searched the charred remains of the van and the house, they found a number of highly incriminating pieces of evidence, including the gun carried by Michele Kiesewetter, the 22-year-old police officer believed to have been shot dead in Heilbronn, Baden-Wurttemberg in 2007. They also discovered a bizarre Pink Panther-inspired homemade DVD gloating that the National Socialist Underground was responsible for a series of unsolved murders known as the Doner Killings, which targeted mostly Turkish immigrants in Germany, some of whom worked in fast food stalls, between 2000 and 2006.

Until now, German detectives have suggested that foreign gangs, probably from Turkey, were responsible for the murders: their investigation was even codenamed Operation Bosphorus.

Relatives of the victims say the reputations of the dead men were besmirched by investigators. Kerim Simsek, whose father Enver was shot down on 9 September 2000, claimed police said his father “was mixed up with the mafia and smuggled drugs — no one even mentioned a rightwing extremist motive,” he told Bild.

Strobele said Germany's elite had totally underestimated the threat of rightwing terrorism. “They have been determined to play it down. Just a few weeks ago, Hans-Peter Friedrich, the interior minister, was saying there was no rightwing terrorism in Germany,” he said. “They are always very quick to jump to conclusions if they think leftwing terrorists or Islamist fundamentalists are responsible for a crime and yet they didn't want to believe there could be a serious problem with neo-Nazis.”

Strobele said that 160 officers worked on Operation Bosphorus, investigating 11,000 people “Why didn't they follow the trail to rightwing radicals?” he said, as he called for a thorough investigation to discover how the terror cell managed to evade capture. More information was needed to establish how and why the secret service agent was in the Kassel internet cafe when the shots were fired in 2006, he said. Until now, the agent has insisted it was an unhappy coincidence he was at the crime scene “either during the murder or within a minute or two of it”, said Strobele.

The agent was arrested after other witnesses noticed he was the only customer who failed to call the police. After being questioned as a suspect, he confessed his identity and no charges were brought. A spokesman for Hessen's BfV said he was subsequently moved out of intelligence work and into a less sensitive department of Hessen's regional council.— Dawn/Guardian News Service