MI5 wants millionaire's murder trial to be held in secret amid claims defendant worked for them

Home Secretary Jacqui Smith is seeking to have part of the trial of Wang Yam - accused of killing 86-year-old Allan Chappelow - held in secret to protect national security, as part of his defence is expected to involve his work for the intelligent services.

Mr Chappelow, a reclusive millionaire, was found beaten to death in his Grade II listed Georgian home in Hampstead, North London, in June last year.

Police found his body under a 3ft pile of newspapers after his bank alerted them that £20,000 had been suspiciously transferred from his account and more money taken from cash machines using his debit card.

Yam, 45, who lived nearby, was arrested four months later in Switzerland.

He denies charges of murder, burglary and obtaining money by deception by pretending to be the writer.

Miss Smith has urged the Crown Prosecution Service to apply for a "gagging order" on preliminary hearings in the case and parts of the trial itself, which starts in July.

An Old Bailey judge will consider the application on January 14 after hearing objections from media organisations.

Yesterday the CPS refused to discuss the reasons behind the application.

But sources close to the investigation said that Yam was a "low-level informant" for the intelligence services and that part of his defence rested on his activities in that role.

Mr Chappelow, a Cambridge graduate, wrote several books, including Russian Holidays in 1955 and a 1962 biography of his friend George Bernard Shaw.

A fellow of the Royal Society of the Arts, he worked briefly as a photographer for the Daily Mail and Daily Telegraph in the 1950s.

He had lived in the house where he died for 72 years, after moving in with his parents at 14.

In the last 15 years, he became a recluse and allowed his garden to become overgrown and full of junk.

Neighbours said that he made rare trips to the library or shops on a 1940s motorbike wearing a leather helmet and an old mac tied with string.

His body lay undetected for several weeks and was found only when his bank suspected he had been a victim of identity fraud after large sums were transferred to a foreign account.

They called police because he did not have a telephone. Cheques, mail and a mobile phone were missing.

Nine days after his body was discovered, a fire broke out at the house, causing severe damage.

Critics warned last night against hearing trials in secret.

Ian Leigh, professor at the human rights centre of Durham University, said: "There is a risk to the administration of justice when this happens. A trial is not a private matter."

A CPS spokesman said: "The prosecution has already given notice that it intends to apply for an order in the case that part of the preliminary proceedings and the trial be heard in camera.

"The order is sought in order to ensure the due administration of justice."