Peter Keeley, also known as Kevin Fulton, said that the chief constable had also apologised to his handler after calling him a “Walter Mitty” and a “fantasist”.
“He [Flanagan] was the source that confirmed to him [Donaldson] that my stuff was 100%,” Mr Keeley said.
Last week, Mr Donaldson told the tribunal that he checked out Mr Keeley’s credibility with “a senior security source” after he was approached with information about Garda collusion.
Mr Donaldson later named retired detective garda Owen Corrigan as an IRA “mole” under privilege in the House of Commons.
Mr Corrigan denies the allegation, and his counsel Mr Jim O’Callaghan put it to Mr Keeley that he had lied to his handlers.
Mr Keeley said he had lied when he pointed out a house in Dublin, saying evidence of a murder was hidden there, but said he was lied to by his RUC Special Branch handlers too, who wanted to hand him over to Gardai to be arrested for a murder.
And he denied that the doorway he pointed out was the constituency office of a TD, saying it was “a doorway in a block of flats”.
The barrister’s cross examination was cut short after PSNI barrister Mr Mark Robinson objected that Mr Keeley was shown a cipher list containing the names of RUC officers, and will continue later.
Mr Keeley said that the Garda mole was referred to in his IRA unit as “Our Friend”.
“There was only one person I knew as Our Friend in the Gardai. That was Owen Corrigan,” Mr Keeley told the tribunal.
Asked by tribunal counsel Ms Mary Laverty SC if there could have been a different Garda giving information to the IRA, he said “Could there be? Of course there could. But I only knew of Our Friend.”
Mr Keeley said that the existence of Garda mole was “one of the worst kept secrets” in his IRA unit.
“Was he doing it for money? I don’t know. Was he doing it for political conviction. I don’t know. I didn’t ask.”
Mr Keeley said he was promised a new identity, but was still living under his own name. He said a stolen photograph had been published in a newspaper, placing him in danger.
“I am well looked after at the moment, but that can stop in the morning, I have nothing in writing,” he said.
Mr Keeley he said he was proud of the lives he had saved, but he also had “demons” about what he did.
He said that he had told his handlers everything he learned and had done in his time as an agent, and that often terrorists were not arrested, they were recruited by security services based on information he supplied.
Keeley said he was recruited for intelligence duties shortl after he joined the British Army in 1980.
He said his first job was to identify the faces of men photographed using a long range lens from a British Army watchtower as they queued for dole payments in Newry.
Mr Keeley told the inquiry he became very friends with convicted IRA man Patrick ‘Mooch’ Blair in the early 1980s.
“His reputation was that of an IRA man, it would have been an inroad. He took my under his wing,” Mr Keeley said.
Keeley was jailed for two years for his role in a smuggling operation before being finally ‘green booked’ by the IRA in the mid 1980s by an unidentified Provisional (identified as Man A) and Mooch.
Mr Keeley said he helped out with the IRA’s internal security unit, known as the “Nutting Squad”, driving suspected informers to two properties for interrogation, but denied ever taking part in them.
He also claimed Freddie Scappaticci and the late John Joe Magee were in the internal security unit.
Lawyers for Mr Scappaticci, who denies he was a member of the IRA, have gone to the High Court seeking a judicial review of the tribunal. Barrister Martin O’Rourke SC said that because Mr Keeley was giving evidence from behind a screen for security reasons, he was unable to look the witness in the face and assess his credibility.
Mr Keeley said that he had met an IRA contact, Mr Patrick Joseph “Mooch” Blair, 48 hours before the Omagh bombing, and could smell diesel oil off him and he was “covered in dust”. He passed the information to his special branch handlers.
By the time the bomb went off, claiming 29 lives, he was on holidays in Tenerife, and when he found out about it he called his handled and asked him if his information had been “put into the system”. The handler assured him it had.
Mr Keeley also said he had passed information to his handlers about two other large dissident bombs in the months before Omagh.
Mr Blair previously told the tribunal that Mr Keeley was a “go-for”, and was never a member of the IRA.
Mr Keeley said that the only time he met detective sergeant Owen Corrigan was in the company of Mr Blair, and the two men discussed Mr tom Oliver, a North Louth farmer.
He said the detective told Mr Blair that Mr Oliver had been found in possession of an unlicensed shotgun, and gardai wanted him to provide information on the IRA.
Mr Keeley said he was later asked by Mr Blair to obtain a van, and it was used when the IRA “arrested” Mr Oliver and questioned him. But he said Mr Oliver was released by the IRA on this occasion.
Mr Oliver was murdered by the IRA I July 1991. Mr Keeley said that he had left Ireland at the time, and was working as a painter in Eurodisney in Paris.
When it was put to Mr Keeley that the book “Unsung Hero” said he did not go to Paris until August 1991, he said the book contained erros and he “did not have editorial control.”