Secret service agents from the Australian Security Intelligence Organisation (ASIO) raided the homes of a lawyer and a former spy of the Australian Secret Intelligence Service (ASIS) in Canberra after it was revealed that they intended to approach an international court in The Hague, backing East Timor's case that Australia had bugged the East Timorese Cabinet ahead of the sensitive oil and gas revenue-sharing negotiations between both countries.

Alleging the espionage, East Timor is challenging the validity of the bilateral agreement it entered into with Australia in 2006 over sharing seabed oil and gas reserves between the countries worth billions of dollars. East Timor has said it will approach the Permanent Court of Arbitration on Thursday in this regard.

Australian Attorney General George Brandis who confirmed that he had authorised the search warrants executed by the ASIO on Tuesday informed the Senate on Wednesday that documents had been seized from the lawyer, Bernard Collaery, who will be representing East Timor in court at The Hague, and a former ASIS officer who was to be a key witness in the case.

The case relates to reports that a team of ASIS technicians inserted listening devices into walls of Cabinet offices constructed and renovated under an Australian aid programme in 2004 in the East Timorese capital Dili.

Mr Brandis told Senate that serving and former ASIS agents faced criminal charges if they revealed their shadowy organisation's functions. ASIS spies operate out of Australian embassies around the world and it is illegal to name serving or former ASIS spies.

Mr Brandis denied that the raids were conducted to help Australia fight the case against East Timor.

"The warrants were issued by me on the grounds that the documents (seized) contained intelligence related to security matters," the Attorney General said in a statement.

"I have instructed ASIO that the material taken into possession is not under any circumstances to be communicated to those conducting those proceedings on behalf of Australia," he added.

Unconfirmed reports said that the former spy's passport had been confiscated so as to prevent him from giving evidence in The Hague. Mr Brandis office refused to confirm or deny this report.

The opposition has, meanwhile, said it will demand a briefing from the government.

"Our relationship with Timor-Leste is an important relationship. Australia has been there with Timor-Leste since independence and a lot of Australians have worked hard to build that relationship," Opposition leader Bill Shorten said.

Greens MP Adam Bandt said he was troubled by the warrants issued by the Attorney General for the ASIO raids.

"I'm disturbed by reports this morning that suggest that our top law officer has been using his powers to interfere with a lawyer and a witness in a court case that's going on," he said.

"If it is true it seems that George Brandis seems to think he's J. Edgar Hoover and is able to throw warrants around like confetti," Mr Bandt said.

Mr Collaery, meanwhile said, the case would proceed without the spy witness.

"This is an attempt to intimidate our witness and to prevent the evidence going forward at The Hague," Mr Collaery told Australian Broadcasting Corp. from Amsterdam.

"I can't think of anything more crass than what has occurred," he added.