By David Ljunggren

OTTAWA (Reuters) - Canada believes a suspected foreign spy arrested in Montreal last week was an elite Russian agent who had pretended to be Canadian for more than a decade, according to a government document released on Tuesday.

The man, who took the false name Paul William Hampel, is due to appear in a Montreal court on Wednesday. Ottawa wants to deport him on the grounds that he is a so-called "illegal" working for Russia's SVR foreign intelligence service.

The case is bound to revive old strains between Russia and Canada, which in 1996 expelled two Russians who it said were undercover SVR agents. They had taken the identity of Canadians who died as infants.

"The Canadian Security Intelligence Service has reasonable grounds to believe that the foreign national alleging to be Paul William Hampel is a member of the Sluzhba Vneshney Razvedki (SVR), the foreign intelligence service of the Russian intelligence services," said the document.

"As a documented Canadian citizen, Hampel has been operating covertly on behalf of the SVR and as such poses a danger to Canada's national security and Canada's interests internationally."

A spokesman for the Russian embassy in Ottawa declined to comment. Foreign Minister Peter MacKay and Public Safety Minister Stockwell Day would not talk about the case before Hampel appears in court, officials said.

The document outlining the government's case said Hampel had used a fake birth certificate to obtain Canadian passports in 1995, 2000 and 2002. The number on the certificate was legally assigned to someone else.

When arrested, he was carrying the certificate, the equivalent of C$7,800 ($6,780) in five different currencies, three cell phones, five sim cards (which store cell phone information), two digital cameras, a shortwave radio as well as index cards detailing major dates in Canadian history.

Hampel will appear before Canada's federal court, which has to review the evidence the government used as justification for seeking his deportation.

"An SVR illegal is an elite Russian intelligence officer ... SVR illegals are regarded as having considerable status by the SVR leadership and are deployed in particularly sensitive operations," the government document said.

"To Russian audiences the SVR makes no secret of its continued high-level espionage and frequently boasts of its theft of Western financial and industrial secrets to aid the failing Russian economy."

It also cited a November 2002 article in the Jane's Intelligence Digest publication that said the SVR was stepping up operations in North America, particularly in cities with sizable Russian emigre communities such as Toronto.

CSIS has complained for years that foreign governments are mounting increasingly sophisticated spying operations in Canada, many of them in a bid to gain industrial secrets.

Earlier this year, MacKay protested about what he said was Chinese industrial espionage. Beijing rejected the allegation.

($1=$1.15 Canadian)