The National Intelligence Service (NIS) has been accused of forging documents -- including Chinese border control records -- to build a spying case against a former Seoul City official who escaped to South Korea from North Korea in 2004.
China has confirmed that the documents were not authentic, forcing the NIS to deny allegations that it was behind the forgery.
Last week, the case took a dramatic turn when an NIS informant linked to the forgeries attempted to commit suicide. He survived and was arrested by state prosecutors today.
Hours later, prosecutors raided the NIS headquarters in southern Seoul.
With local elections due in early June, lawmakers from Park's ruling Saenuri Party have called for NIS Director Nam Jae-Joon to resign.
"It is a very disturbing issue. I was appalled at the suspected forgery and cover-up attempts", Shim Jae-Chul, a senior Saenuri lawmaker, told a meeting of top party officials.
"It seems inevitable for Director Nam to take responsibility," Shim said.
It is a sensitive case for President Park who appointed Nam a year ago.
The modern-day NIS has also been tainted by a series of scandals, most recently the admission by some agents that they had meddled in the 2012 presidential election.
Nam's predecessor as NIS chief, Won Sei-Hoon, was convicted last month of taking bribes and jailed for two years.
Won faces separate charges over the election meddling scandal, accused of organising an online smear campaign against the opposition party candidate.
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