An undercover police officer told “grotesque and cruel” lies while emotionally manipulating two women he had deceived into long-term sexual relationships, the spycops public inquiry has heard.

Carlo Soracchi admitted he sought to elicit the empathy of one of the women by claiming that his sister had been abused by his father. He also told her that his father had died when he was actually alive.

Soracchi also admitted to deceitfully receiving taxpayers’ money to cover the cost of a trip to Italy to celebrate Valentine’s Day with the woman, Donna McLean.

He was questioned at the inquiry about his deployment, which involved infiltrating leftwing and anti-fascist campaigners between 2000 and 2006.

During that time, McLean had a two-year relationship with him. The inquiry heard how he asked her to marry him and told her mother he wanted to have a baby with her. After accepting the marriage proposal, she discussed details of the wedding including seating plans and menus with Soracchi.

Other witnesses have said the engagement was common knowledge within her circle of friends. Soracchi admitted he had the relationship with her, but denied that he asked to marry her or have a baby with him.

McLean did not know that he was already married with a child, nor that he was an undercover police officer who would have to disappear at the end of his deployment.

In 2003, Soracchi flew with McLean to Bologna for a long weekend to celebrate Valentine’s Day and his supposed birthday. Police documents showed that he claimed £477 for the cost of the trip. His managers recorded that this expenditure was justified on the grounds that he was meeting Italian socialists as part of his infiltration of leftwing groups.

Asked by David Barr, the inquiry’s chief barrister, if he had deceived his managers about the real purpose of this trip, he agreed, accepting that it was “purely pleasure”.

Soracchi said that over Christmas 2003, he went to Italy to look after his father who had had a stroke. In the early hours of New Year’s Day in 2004, he rang McLean and lied when he told her that his father had died.

After the supposed funeral of his father, Soracchi told her that his sister had suffered abuse at the hands of his father for years. Barr said this was “particularly calculating and distasteful” as McLean had previously confided to Soracchi that she had had a physically abusive father.

Soracchi said he wanted to solicit her empathy while he was apparently having a breakdown and wanted to end the relationship, against her wish. Asked if he deliberately exploited McLean’s empathy, he agreed, adding: “We were undercover police officers, it’s what we did.” He accepted his behaviour had been “grotesque”.

McLean said his deception of her was “was cruel, unnecessary, inhumane, malicious and has led to a deep ongoing impact” – Soracchi accepted this was true.

Soracchi also faced questions about an apparent discrepancy in the rent that he claimed from the police budget for the one-bedroom flat he shared with McLean in Maida Vale, London, for more than a year.

Soracchi said he gave £685 to McLean each month as his share of the rent and other costs. However, McLean said the total rent for the flat was £320 a month, and that he contributed up to £200.

Asked by Barr whether it was true that he was “making a considerable profit?” He replied: “No, it is not.”

He deceived a second woman, known as Lindsey, into a year-long relationship. He is alleged to have used taxpayers’ money to pay for a romantic break in Venice with her in 2001.

The inquiry is examining the conduct of about 139 undercover officers who infiltrated political groups over more than four decades.