History remembers Benito Mussolini as a founder member of the original Axis of Evil, the Italian dictator who ruled his country with fear and forged a disastrous alliance with Nazi Germany. But a previously unknown area of Il Duce's CV has come to light: his brief career as a British agent.

Archived documents have revealed that Mussolini got his start in politics in 1917 with the help of a £100 weekly wage from MI5.

For the British intelligence agency, it must have seemed like a good investment. Mussolini, then a 34-year-old journalist, was not just willing to ensure Italy continued to fight alongside the allies in the first world war by publishing propaganda in his paper. He was also willing to send in the boys to "persuade'' peace protesters to stay at home.

Mussolini's payments were authorised by Sir Samuel Hoare, an MP and MI5's man in Rome, who ran a staff of 100 British intelligence officers in Italy at the time.

Cambridge historian Peter Martland, who discovered details of the deal struck with the future dictator, said: "Britain's least reliable ally in the war at the time was Italy after revolutionary Russia's pullout from the conflict. Mussolini was paid £100 a week from the autumn of 1917 for at least a year to keep up the pro-war campaigning – equivalent to about £6,000 a week today."

Hoare, later to become Lord Templewood, mentioned the recruitment in memoirs in 1954, but Martland stumbled on details of the payments for the first time while scouring Hoare's papers.

As well as keeping the presses rolling at Il Popolo d'Italia, the newspaper he edited, Mussolini also told Hoare he would send Italian army veterans to beat up peace protesters in Milan, a dry run for his fascist blackshirt units.

"The last thing Britain wanted were pro-peace strikes bringing the factories in Milan to a halt. It was a lot of money to pay a man who was a journalist at the time, but compared to the £4m Britain was spending on the war every day, it was petty cash," said Martland.

"I have no evidence to prove it, but I suspect that Mussolini, who was a noted womaniser, also spent a good deal of the money on his mistresses."

After the armistice, Mussolini began his rise to power, assisted by electoral fraud and blackshirt violence, establishing a fascist dictorship by the mid-1920s.

His colonial ambitions in Africa brought him into contact with his old paymaster again in 1935. Now the British foreign secretary, Hoare signed the Hoare-Laval pact, which gave Italy control over Abyssinia.

"There is no reason to believe the two men were friends, although Hoare did have an enduring love affair with Italy," said Martland, whose research is included in Christopher Andrew's history of MI5, Defence of the Realm, which was published last week.

The unpopularity of the Hoare-Laval pact in Britain forced Hoare to resign. Mussolini, meanwhile, built on his new colonial clout to ally with Hitler, entering the second world war in 1940, this time to fight against the allies.

Deposed following the allied invasion of Italy in 1943, Mussolini was killed with his mistress, Clara Petacci, by Italian partisans while fleeing Italy in an attempt to reach Switzerland two years later.

Martland said: "Mussolini ended his life hung upside down in Milan, but history has not been kind to Hoare either, condemned as an appeaser of fascism alongside Neville Chamberlain."