A loophole in a deal barring the US from spying on the UK could leave Bermuda open to snooping by American security agencies.

The US and its allies Britain, America, Canada, Australia and New Zealand — part of what the US calls the Five Eyes group — have an agreement that they do not spy on each other.

But The Washington Post revealed this week that UK Overseas Territories are not included in the deal, because it would slow the US National Security Agency (NSA) interception system down too much if they were excluded as well.

However, US security expert William Arkin, who worked in US intelligence in Berlin at the height of the Cold War, said it was unlikely the Americans would tap phones or check e-mails from Bermuda because Britain’s Government Communications Headquarters (GCHQ), which works closely with its US counterparts, would do it for them.

“The United States and its four closest allies collect intelligence on everything they perceive to be of interest,” Mr Arkin said.

He said the US might want intelligence for threat assessment on ports where its ships visited — or information on money laundering, terrorist activity or tax avoidance by US citizens.

He added: “Having said all that, the country that is monitoring Bermuda is Britain — Bermuda should not be looking in the direction of the NSA, they should be looking in the other direction.”

He was speaking after The Washington Post this week revealed the “elastic” court authority given to US spy agencies to protect the country’s national interests abroad.

But the report added: “Even the no-spy agreements with the Five Eye countries have exceptions.

“The agency’s principal targeting system automatically filters out phone calls from Britain, Canada, Australia and New Zealand.

“But it does not do so for their 28 sovereign territories, such as the British Virgin Islands.

“An NSA policy bulletin distributed in April 2013 said filtering out those country codes would slow the system down.”

Mr Arkin said that Bermuda — although it no longer had US military bases — retained a geographic importance for both the UK and US and hosted “an enormous amount” of US-owned cruise ships and American tourists, as well as international business.

“If there was a need to monitor something in Bermuda, it would be monitored, but it would be most likely monitored by GCHQ, if not by the Bermuda authorities themselves,” he said.

But he stressed that surveillance “did not necessarily mean that Bermudian communications were being monitored or that Bermudian civil rights had been violated.”

And he said: “It’s virtually transparent so I find it impossible to think that the US would have any security interest in Bermuda the UK would be unaware of.”

Mr Arkin, a journalist who has written for The Washington Post, said that revelations on spying by US whistle-blower Edward Snowden had highlighted the extent of security service surveillance.

He added that collection of information was “routine” and that phone and internet surveillance was now “a gigantic industry” with the line between what is collected and what is needed for intelligence yet to be drawn.

He said: “A really good example is, let’s imagine, there is a person who is avoiding American taxes or laundering money or hiding in Bermuda to avoid the authorities, and imagine that person was under investigation by the FBI or the Department of the Treasury.

“Their name might go on a watchlist which goes to the NSA, and the NSA might monitor their communications as part of an investigation. If they were in Bermuda, e-mails and phone calls might be intercepted.”

Mr Arkin said: “That’s the world we live in and I want that to happen and have effective law enforcement and want it to be targeted.”

US Consul General Bob Settje said: “To my knowledge, the United States has never spied on Bermuda under this policy or any other.”

And the UK government was also staying tight-lipped on surveillance.

Governor George Fergusson said: “In accordance with long-standing practice, I cannot comment on intelligence matters.”