In an interview with the Guardian Weekend magazine, Kennedy, who went "rogue" and offered to help environmental campaigners accused of planning to break into a power station, says he has suffered severe post-traumatic stress disorder and has been suicidal. His lawyers have been instructed to consider legal action against the police.
The latest officer was reported to have been embedded in an anti-capitalist group for four years under the fake name of Simon Wellings. Newsnight on BBC2 reported that his true identity was discovered through a police blunder.
Wellings inadvertently phoned a campaigner with the Globalise Resistance anti-capitalist group on his mobile phone while discussing photographs of demonstrators with another officer at a police station.
The call was recorded on the campaigner's answerphone and Wellings is heard being pressed to identify protesters at demonstrations, according to Newsnight. He is recorded saying: "She's Hanna's girlfriend - very overt lesbian - last time I saw her, hair about that long, it was blonde, week before it was black."
The infiltration of police spies became controversial after the identification of Kennedy and four others who had posed as members of a variety of political groups including environmental, anti-racist and anti-globalisation campaigns.
The infiltration is the subject of four official investigations after police chiefs and ministers admitted the undercover operations had gone "badly wrong".
Kennedy believes that other undercover officers have been similarly ostracised. "The way the police handled the whole extraction .. is absolutely thoughtless from a psychological point of view and from a safety point of view."
He argues that the damage caused by such undercover work is too great, and that the police should rely more on electronic rather than human intelligence.
Wellings pretended to be an activist with the group between 2001 and 2005. He always seemed to have enough money to go to many demonstrations in London, New York, Paris, Seville and other cities.
Guy Taylor, a member, told Newsnight: "He didn't have much of a backstory. We never met any of his friends or his family." He volunteered to be the group's photographer and took "plenty of photographs".
Wellings vanished after being rumbled by the other activists.
The accidental phone call also highlights the role of police units which take photographs of protesters to be stored in secret databases such as Scotland Yard's CO11 public order branch.
The other police officer is heard on the tape pressing Wellings to put names to the photographs, according to Newsnight. "Thing is we've got the CO11s. They're like - who are these people ? Do you know who they are ?"
Last night the Metropolitan police said:"The use of undercover officers is a valuable tactic in the fight against crime and disorder to keep people and communities safe.
"Their use is highly regulated and governed in law through the Regulation of Investigatory Powers Act (RIPA) and must be necessary, proportionate and lawful.
"The deployment of undercover officers is also overseen by the Surveillance Commissioner who must be satisfied by their use."