Workers preparing the former headquarters complex of bankrupt Nortel Networks in Ottawa, Canada, have discovered that the complex had been bugged by spy gear. As a result the Canadian Department of National Defense may not move in.

The report amplifies previous stories that Nortel had allegedly been hacked for years by Chinese operatives as part of an industrial espionage campaign.

According to the Ottawa Citzen, workers ”discovered electronic eavesdropping devices, prompting new fears about the security of the facility.”

CTV News in Canada reported that as a result of the discovery the defense department “may not move into its new headquarters.”

CTV described the complex as “riddled with eavesdropping devices.”

The Canadian government agreed to take over the complex in 2010 as Nortel foundered toward bankruptcy and liquidation. Corporate hacking has been alleged for years as a reason for Nortel’s collapse.

Nortel once employed some 8,000 people in RTP. Its former campus here is now occupied by Fidelity Investments, which has vastly renovated and added to numerous buildings.

The Citizen noted that it is “not clear whether the devices were recently planted or left over from an industrial espionage operation when Nortel occupied the complex.” The newspaper recently received documents pertaining to the bugging discovery. It asked for details about the bugs and whether they were still functioning.

“The Department of National Defence and Canadian Armed Forces cannot provide any information regarding specific measures and tests undertaken to secure a location or facility for reasons of national security,” noted an email from DND spokeswoman Carole Brown. “The DND/CAF must maintain a safe and secure environment at all of its facilities, in order to maintain Canada’s security posture at home and abroad.”

The Citizen said that although the situation just came to light publicly through its reporting defense officials have been aware of the problem since April of 2012. 

Nearly $1 billion had been budgeted for the move into the Nortel complex. 

The defense department “may abandon the move, and sources said it’s unlikely any other department would take over the former Nortel site because of the security risks,” CTV reported.

The full Ottawa Citizen report can be read online.

The CTV report also is available.