NEWSWEEK has learned that when the CIA showed the material to a team of top nuclear-weapons experts, they “practically fainted.” Chinese scientists routinely used phrases, descriptions and concepts that came straight out of U.S. weapons labs. “The Chinese penetration is total,” says an official close to the investigation. “They are deep, deep into the labs’ black programs.”

U.S. officials believe that China may have acquired design information over the last two decades about seven U.S. nuclear warheads, including the neutron bomb created in the early 1970s. They may also have stolen secrets about U.S. efforts to devise a nuclear weapon tailored to create an electromagnetic pulse–a man-made lightning bolt that would short out anything in an enemy nation that uses electricity.

The government’s damage-assessment team is now trying to figure out who could have given the secrets to Beijing. They do not believe it was a foreign visitor to the labs, or leaks through U.S. allies–none had access to the closely guarded material. Which leaves an unsettling possibility: “This was done by American citizens,” says one source close to the investigation. Yet officials say only a handful of top insiders at the labs and the Energy Department even knew about some of the secret programs, which has left the close-knit nuclear community wondering if a colleague could have done the unthinkable. (Security breaches aren’t the only way China has acquired U.S. nuclear secrets. NEWSWEEK has learned that Beijing recently got hold of two U.S. cruise missiles that failed to detonate during last fall’s retaliatory attack on terrorist Osama bin Laden in Afghanistan. U.S. intelligence agencies want to know if the Chinese have attempted to copy the weapon’s sophisticated guidance and avionics technology.)

Why did it take the intelligence community so long to realize they had a debacle on their hands? According to one official, though U.S. spy agencies use a dazzling array of technical wizardry to collect vast stacks of raw intelligence data, they don’t have enough analysts to make sense of it all. And sources say the American nuclear-weapons program is so closely guarded that most analysts aren’t allowed to know the details. Without a grasp of the technology and its arcane lingo, the analysts didn’t know what warning signs to look for as they pored over Chinese intelligence reports–and may have missed a disaster that was under their noses.