The age of Elizabeth I, so often celebrated as a period of glorious national achievement, was one of intense insecurity. Beset by enemies at home and abroad, the Queen knew that her hold on the crown was always precarious. The Catholic powers of Europe regarded her as a heretic and a bastard. Pope Pius V tried to depose her. Philip II of Spain attempted armed invasion. The loyalty of English Catholics, unreconciled to her Protestant church settlement, was always in doubt.

Elizabeth created further anxiety by persistently refusing to nominate her successor. The stability of the regime thus depended entirely on her own personal survival. As one MP put it in 1567: "If God should take her Majestie, the succession being not established, I know not what shall become of myself, my wife, my children, lands, goods, friends or country."

Feelings of anxiety and distrust were intensified by an unending series of conspiracies and assassination plots. The Rising of the Northern Earls in 1569, the Ridolfi Plot of 1569-71, the Throckmorton Plot of 1583 and the Babington Plot of 1585-6 were only the best publicised of repeated attempts to dethrone the Queen by insurrection, foreign invasion or simple assassination. There were three such plots in 1596 alone. Many of these conspiracies sought to replace Elizabeth with the Catholic Mary Stuart, the ex-Queen of the Scots who had taken refuge in England after her forced abdication in 1568, and whose strong hereditary claim to the succession was terminated only by her execution in 1587.

Prominent among the conspirators were the English Catholic exiles who had fled to the continent after Elizabeth's succession. Young men were trained for the priesthood at newly created English seminaries in Douai and Rome under the supervision of their spiritual leader, William Allen, formerly Principal of St Mary Hall, Oxford. They were then sent to England as missionaries to bring the country back to Rome. Most English Catholics refused to allow their religion to shake their political allegiance to the Queen, and many of the seminary priests regarded their mission as purely pastoral. But Allen himself believed in the Papal deposing power, and was committed to a policy of military invasion. One English priest assured Philip of Spain in 1596 that "if the entire destruction of England was for the greater glory of God", he would be glad to see it done.

Confronted by these threats, the Elizabethan government embarked on a draconian policy of counter-terrorism. The laws of treason were extended to catch not just those who questioned Elizabeth's right to rule, but all missionary priests and those who sheltered them. Torture was not permitted by the common law, but special powers were invoked to justify its regular use to extract information from Catholic suspects. The procedure in treason trials gave the accused no chance of offering an adequate defence, and unsafe convictions were common. The standard penalty for traitors was to be hanged, cut down when still alive, castrated, disembowelled and dismembered. Over 100 Catholic priests suffered this fate. This was not enough for Elizabeth, who wanted her Privy Councillors to devise an even more terrible death for the Babington conspirators, who had planned to murder her.

But before plotters and missionary priests could undergo the rigours of the law, they had to be caught. To help them do this, government ministers created a network of spies, informers and agents provocateurs. These forerunners of MI5 were the "watchers", whose activities form the subject of Stephen Alford's absorbing and closely documented book. Alford is a professional historian, with an excellent command of the manuscript sources, and he tells an exciting story. Although he adds many new details, its outlines have been familiar since at least 1925, when the American historian Conyers Read made espionage a prominent theme in his three-volume biography of Sir Francis Walsingham, the Queen's Secretary of State and chief spymaster, who was the "C" of the Elizabethan intelligence service. Appropriately, Read was recruited during the second world war to work for the Office of Strategic Services (OSS), precursor of the CIA.

Alford does not claim to offer a comprehensive study of Elizabethan intelligence operations; he skates quickly over some episodes and makes no mention of such obvious figures as the notorious torturer and interrogator, Richard Topcliffe. But his accounts of the unmasking of the Throckmorton and Babington plots are full and gripping, and he throws much light on the secret agents who exposed these and similar conspiracies, and, in some cases, fomented them.

Elizabethan spies were employed on an ad hoc basis and paid by results, a method which inevitably produced wildly exaggerated scare stories. Some agents were highly accomplished figures, such as Thomas Phelippes, a skilled linguist, mathematician and expert cryptographer. Some were captured Catholic priests who were "turned" and sent back to their masters as double agents, a technique often said to have been invented during the second world war by the Oxford don, JC Masterman. Several spies crop up in other contexts: the writer Anthony Munday, author of an eyewitness account of life at the English College in Rome, later collaborated with Shakespeare; and Robert Poley, who went on 26 missions for the Queen's "special affairs", was one of those present at the killing of Christopher Marlowe. Many agents were bankrupts who began and ended their careers in prison; having offered Walsingham their services as stool pigeons, they were despatched abroad, where they were frequently caught and sent back to spy for the enemy, only to be arrested again and returned. As with some modern intelligence agents, it was often unclear, even to themselves, where the loyalties of these chronic side-changers really lay.

Alford vividly evokes this murky world of codes, ciphers, invisible ink, intercepted letters, aliases, disguises, forgeries and instructions to burn after reading. The Catholic plotter Gilbert Gifford was "the most notable double treble villain that ever lived", thought one contemporary; 400 years before John Le Carré, Walsingham had him publicly denounced as a traitor in order to provide cover for his activities as a double agent. The most spectacular sting involved obtaining the evidence necessary to convict Mary Queen of Scots by persuading her to employ a supposedly secret method of corresponding with the French ambassador; Walsingham's spies obligingly carried her letters for her, in cylinders concealed in beer barrels, making copies en route, and even adding a forged postscript to one of them, inviting the recipient to divulge the names of his fellow-conspirators.

Entrapment was common, but the technique could backfire. William Parry was a spy for Elizabeth's Treasurer Lord Burghley with a tendency to be too clever by half. After inveigling a Catholic gentleman into a plot to kill the Queen, he was himself accused and executed for his involvement in it.

Inevitably, the evidence for many of these transactions is incomplete and ambiguous. Alford, however, does not allow many scholarly doubts to impede his flowing narrative or inhibit his crisp judgments on individuals and their motives. On the other hand, he is too fastidious to draw the modern analogies that will certainly occur to his readers. It is tempting to regard William Allen as a 16th-century Osama Bin Laden, and the English College at Rome as the equivalent of a terrorist training-camp in Pakistan. Young Catholic priests, blessed by the Pope, and knowingly heading for a terrible death, were the suicide bombers of their time, even though their only weapons were spiritual ones. Walsingham's counter-terrorists resemble their modern counterparts in their eagerness to bypass normal legal process by using torture. Unlike some of their successors, they seem to have drawn the line at targeted assassination, but if the Elizabethans had had telephones they would undoubtedly have tapped them.

Like Elizabeth I's agents, today's security services keep suspects under surveillance, intercept their communications, infiltrate their training camps, bribe informers and make pre-emptive arrests. Whether they also forge messages, employ agents provocateurs and engage in entrapment, we do not know, but it would be surprising if they didn't. For the methods of espionage have been remarkably constant over the centuries. Stephen Alford's engrossing book reminds us that most governments will stop at very little if national security is at stake. When political conflicts are exacerbated by fanatically held religious differences, the outcome is even more deadly.

Keith Thomas is the author of The Ends of Life: Roads to Fulfilment in Early Modern England (OUP).