Greece, which has spent an unprecedented one billion euros on Games security, attacked the paper's ethics and said the reporter was inspired by crime fiction.
The Sunday Mirror tabloid said reporter Bob Graham also used a bogus job as a driver to wander round the main stadium with passes in the names of "Michael Mouse" and "Robert bin Laden", and to get near world leaders at Friday's opening ceremony.
"Security is absolutely disgraceful. The Games are a terrorist's dream come true," Graham said in a Mirror statement.
"Given assurances from the authorities and the resources available, it is a scandal on an Olympic scale."
For the first Summer Olympics since the Sept. 11 attacks on the United States, Athens has spent four times more on security than Sydney did in 2000, and security personnel outnumber athletes seven to one.
Greece's Public Order Minister George Voulgarakis reacted angrily to the claims, saying the article was a "profound insult to journalism and the principles of objective and responsible reporting".
"I would recommend to Mr. Graham to read fewer detective novels," he said in a statement.
The Mirror, using an expose tactic popular with Britain's tabloids, said it launched its investigation five weeks ago when Graham took a driving job with a British contractor.
There was no formal interview, no references were needed and he was immediately given a pass to the main stadium, it said.
PLASTICINE, BATTERIES AND TAPE
"An investigation by the paper shows that the lives of athletes and spectators have been put at risk by shockingly inadequate security arrangements," the paper said.
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"Days earlier he had planted three 'suspicious items' that resembled components for a would-be bomb around the site. Packages containing slabs of grey plasticine, batteries, coils of wire and electrical tape were left in various locations."
None were found during security sweeps, the Mirror said.
The Public Order Ministry said in a statement that the venues were completely safe.
"The security measures and checks are in full development and according to the toughest international criteria, taking full advantage of international experience and technology," it said.
Graham said he regularly drove a van in and out of the security cordon, where guards never properly checked the dozens of bags of ice he was bringing in to chill drinks for workers.
(Additional reporting by Dina Kyriakidou in Athens)