Shiite officials have established their own "shadow" secret service because they don't trust Iraq's CIA-funded national intelligence agency, which is Sunni led, the Washington Post (NYSE:WPO) reported.

The two agencies risk deepening Iraq's civil war if the country's political parties cannot agree on how to rule Iraq, one analyst warned.

"If no critical compromise is reached, the security services are going to fall apart on ethnic, sectarian and party lines," said Joost Hiltermann, Middle East director of the International Crisis Group. "It will be a failed state situation like Somalia." The Shiite spy agency was built by Sherwan Waili, the minister of state for Iraqi national security. Waili's agency has about 1,200 intelligence agents and operates with a meager budget.

Waili's agency provides information that isn't being supplied by the Iraqi National Intelligence Service, or INIS, Iraq's official spy service, the Post said.

The INIS is commanded by Gen. Mohammed Shahwani, a Sunni Arab involved in a CIA-backed coup plot against Saddam Hussein a decade ago.