World War II had just ended and the city of Berlin was divided by a wall between the West German side, back ed by the USA, and the communist East German side, backed by the USSR. As the Cold War between east and west heated up, the CIA and Britain’s SIS agreed to join forces to spy on the Soviets stationed in East Berlin. Operation Gold, also known as Operation Stopwatch, had begun. An underground tunnel joining West and East Berlin was built.
    Initially at the end of the war, communications between Moscow and the puppet states on the eastern side of the Iron Curtain were transmitted by radio, making them extremely easy for Allied intelligence to intercept. Then the Soviet Union switched to telephone landlines for the purpose of exchanging information; the West was left in the dark, unable to listen in as the secret conversations took place.
    The British secret service had previously used a tunnel for espionage in Vienna when the Austrian capital was in the hands of the KGB. Taking inspiration from this success, they opened negotiations with the CIA to start a similar operation. A West German spy alerted the CIA to a junction two meters below the ground and close to the border of West Berlin where three main telephone cables intersected. The British SIS and the CIA set up a joint committee to build a tunnel under the Berlin Wall so the East German/Soviet phone lines could be tapped. The British agreed to fund the construction and the Americans agreed to manage and oversee the project.
    First a warehouse was built on the western side of Berlin. Unusual in design, the building had a basement 23 feet deep. The engineers proceeded to blast the tunnel with dynamite and re-enforce the sides with sand. The tunnel had been rigged with explosives set to go off in case the enemy government were to discover its existence, making any espionage operations inside the construction an anxiety producing business. Upon completion, the Berlin Tunnel extended under the border  
for about 1500 feet. British Army captain and Alpine skier Peter Lunn did the significant work of actually tapping into the phone lines once they were discovered. Electric handling equipment was installed so that incoming information could be redistributed back to London for transcription and interpretation. The Berlin Tunnel opened for operations in 1953.
    SIS and the CIA spent several years listening in on information flowing from the KGB station in East Berlin to Moscow and other points east. A significant portion of the intelligence was unintelligible since it was being sent using telegraph pulses in multiplexed code that agents were unable to crack. In the end it did not matter anyways; due to a British double agent named George Blake, the Soviets were informed about the tunnel long before the two espionage agencies began construction since Blake had been part of the planning committee. The Soviets kept their knowledge of Operation Gold secret so as not to reveal Blake as a mole. The KGB as well as the SIS and CIA kept the tunnel secret from the West and East German secret police because both sides knew they could not be trusted. So the tunnel was allowed to operate until 1961. Since the Soviets knew of its existence, they possibly and deliberately used the phone lines for unimportant or even misleading  information. Instead they had been sending truly important communications with Moscow via telephone wires built above ground to avoid being tapped by spies in the tunnel.
    In 1955, George Blake was transferred to another station and the KGB opened up the tunnel on the East Berlin side. The British and American secret service had been using the tunnel for eight years before they realized the communists knew about everything they were doing. It was a waste of US$4.5 million.
    George Blake was tried and convicted for treason in 1961. The British and Soviet governments clandestinely agreed to keep knowledge of the tunnel out of the international media’s hands so both sides could save face. To this day, CIA documents about Operation Gold are kept classified; many believe it is because they contain information that could humiliate the agency.