Michael "Mike" Smith was a sergeant in the Royal Air Force under Group Captain Gilmore. He was extremely prejudiced towards black people and a member of a fascist organisation known as the Association.
During the Shoreditch Incident in November 1963, Smith was working as an informant for George Ratcliffe. He had a romantic interest in Ace, but when she discovered he was a spy she was disgusted with him. Smith tried to explain his actions by saying "It's just that you have to look after your own. Keep the outsiders out."
He knew some of the Daleks' plans on Earth at the time and that they were seeking the Hand of Omega. Over the course of the Seventh Doctor's investigations, Smith was outed as an informant. He was detained, but later escaped to the Renegade Daleks' base.
There, Smith and Ratcliffe were betrayed by the Renegades. They were saved from extermination by an attack on the Renegades by the Imperial Daleks. Stealing the Time Controller from the Renegade Daleks, the two fled, pursued by the Girl, who quickly killed Ratcliffe. Escaping to his mother's boarding house, Smith ran into Ace where, after failing to convince her to join his crusade, he held her at gunpoint. Answering a knock at the door, Smith was attacked and killed by the Girl. (TV: Remembrance of the Daleks)
The Doctor later discovered Ace beating up a teddy bear in her room aboard the TARDIS, yelling that it betrayed her. When she went to the bath, he sneaked in and found "Mike Smith" written on the bear. (PROSE: Legacy)