OTTAWA - A lengthy dispute over disclosure of intelligence files on socialist icon Tommy Douglas has prompted the federal government to lift -- at least partially -- the shroud of secrecy that's blanketed many historical documents.

During opening arguments Wednesday in a court battle over the decades-old Douglas dossier, federal lawyer Gregory Tzemenakis revealed that the government has adopted a new policy governing release of historically significant intelligence files.

The new policy could result in the release of thousands of previously withheld documents.

Tzemenakis said the new policy was applied in the Douglas case, resulting late last week in the release of some 300 additional pages of the 1,142-page file amassed by the RCMP on the former Saskatchewan premier and federal NDP leader.

That's in addition to more than 400 pages, some of which were heavily censored, released initially in response to a 2005 Access-to-Information request by Jim Bronskill, a reporter for The Canadian Press.

Bronskill launched a court challenge in 2009 after the federal information commissioner agreed most of the dossier should be kept under wraps.

Even with the new policy, more than one-third of the pages in the Douglas file remain totally blacked out.

Under the new policy, Tzemenakis said the government will endeavour to disclose information gathered by human sources, provided it doesn't reveal the identity of those sources.

As well, he indicated information can be disclosed if it was gathered by technical means, such as surveillance or intercepts, or involves only "transitory" subjects of interest. And the names of people who attended meetings or events monitored by security agencies can also be released.

The policy has been adopted by Library and Archives Canada, which is currently in possession of the Douglas dossier, and by the Canadian Security Intelligence Service, which advised against full disclosure of the file.

In a statement following Wednesday's court hearing, CSIS said the release of additional material from the Douglas file "is proof of our commitment to open the historical record and contribute to the national narrative."

"While CSIS continues to protect records obtained through human sources, we sought to facilitate the release of many records obtained through technical sources such as intercepts and surveillance."

Paul Champ, lawyer for The Canadian Press, said the policy change represents a "significant departure" from past practice, in which intelligence information has been jealously guarded for decades, even long after all involved are dead.

"That's a victory right there, quite clearly," Champ said.

"That's going to mean hundreds or thousands of more records being available to Canadian journalists and historians and the public."

Nevertheless, Champ said the exact policy and how it will be applied remains unclear. Hence, he said it remains important for the court to make a binding ruling on the matter.

"We need a forceful ruling from the court so that all of these historical records can be available to everyone in Canada."

The case pits the right of Canadians to see historically significant documents against the government's determination to protect the secrets of the spy trade.

Until now, CSIS has argued vehemently against uncensored release of the Douglas files. It maintains full disclosure could jeopardize the lives of confidential informants and compromise the agency's ability to conduct secret surveillance.

In its statement Wednesday, the agency reiterated it "needs to screen such documents to make sure they do not reveal any tradecraft or expose any sources that could jeopardize national security today."

The Mounties, who were responsible for domestic security until CSIS was created in 1984, shadowed Douglas from the late 1930s to shortly before his death in 1986.

Uncensored portions of the documents released thus far show that the RCMP attended his speeches and political rallies and even eavesdropped on his conversations. They were particularly interested in his links to the peace movement and members of the Communist party.

Throughout Wednesday's hearing, Judge Simon Noel repeatedly expressed skepticism about the need for secrecy around decades-old intelligence.

He pointed out it's hardly news that the RCMP was spying on the NDP and Communist parties; that information emerged in testimony before the McDonald commission of inquiry into the RCMP security service in the late 1970s.

Noel questioned why the mandate of Library and Archives, to preserve and make available historical documents, was not mentioned in the various guidelines developed to help the agency decide which portions of old intelligence files can be safely released.

And he pressed Tzemenakis to explain what CSIS means when it insists on protection of human sources: Does that apply only to confidential informants who were cultivated and paid by the agency or does it include, for example, a landlord who volunteered innocuous information about Douglas's apartment lease?

Tzemenakis said he didn't believe it would include the latter. But he stressed that human sources are "the lifeblood" of CSIS and, consequently, they must "tread extremely carefully" when disclosing information that could reveal their identities.

Champ argued that CSIS has failed to provide specific reasons for each exemption, applying a blanket rationale for refusing to disclose information in the Douglas file. Nor did the agency make allowances for the passage of time, which would render much of the information less sensitive.

Moreover, Champ said Library and Archives appears to have relied entirely on the spy agency's advice, abdicating its responsibility to weigh the alleged risks to national security against public interest in historically significant documents.

Noel appeared to agree, saying at one point: "Surely, that discretion must take into account that historical component."

Last week's release of additional material from the Douglas file created a wrinkle in the court case. Noel expressed concern that he may not have jurisdiction to rule on the new material; that Bronskill may first have to file another complaint with the information commissioner.

He instructed both sides to meet with the commissioner and gave them until March 31 to find a resolution to the potential jurisdictional issue.