Bill Haydon is recruited into the Circus (John le Carré's lightly fictionalised version of MI6/SIS) in 1938 while a brilliant student at Oxford University. He is an aesthete, highly intelligent and incredibly charming. It appears that Haydon is smitten with fellow student Jim Prideaux, an acclaimed athlete. Haydon introduces Prideaux to the Circus "talent spotters" and the two rise through the Circus during World War II, with Haydon ascending to become one of the senior officers in London and Prideaux a resourceful field agent.
It is never made clear whether a physical relationship developed with Prideaux, although it is hinted at. Bill Haydon's bisexuality is referred to at several points in the novel.
The novel reveals that Haydon is a double agent working for Moscow Centre. As he rises within the Circus, Haydon (code-named "Gerald") introduces a new (and ultimately bogus) Soviet intelligence source called "Merlin", the product of the source being termed "Witchcraft". Percy Alleline is keen to use this source as a bargaining chip with the CIA.
Control, the anonymous chief of the Circus, comes to suspect that there is a mole deep in the organisation. After much thought, he eliminates all but Alleline, Roy Bland, George Smiley, Haydon and Toby Esterhase from his suspicions. 
At about this time, Haydon cuckolds George Smiley, beginning an affair with Smiley's wife, Lady Ann, on the orders of his KGB controller, Karla, in order to discredit or undermine any suspicions Smiley may have or develop about Haydon.
Control then sends Prideaux to Czechoslovakia in order to obtain the mole's identity from anti-Soviet Czech General Stevcek, but Operation Testify proves a failure with Prideaux betrayed and captured. After Prideaux is shot and undergoes months of beatings and torture, he is eventually returned to Britain, but his career in intelligence is over and he is bitter after his experience in the Eastern Bloc. 
Control is forced out of power and Alleline becomes Chief, while Haydon assumes control of London Station, which he maneuvers into being placed in control of all foreign stations—effectively giving Haydon unfettered access to intelligence and details of operations and control over those operations. Because of this, the Circus' intelligence sources dwindle to almost nothing other than "Witchcraft". Smiley's investigations eventually unmask Haydon as the mole. Under interrogation, he reveals that he is a full Colonel in Soviet intelligence. Plans are set in motion to exchange Haydon for Western agents held in the Eastern Bloc. Before this can happen, however, he is killed. It is strongly implied, though never stated, that he was killed by Prideaux, as revenge for Haydon's betrayal and the torture he suffered in Czechoslovakia.
It is implied that Haydon is bisexual; he asks Smiley to give some money to a boy and a girl so that neither of them will talk, and Smiley also speculates that Haydon and Prideaux had been lovers.
Haydon is portrayed rather in the mould of real-life double agent Kim Philby who is known to have compromised le Carré's own career in MI6; certainly his actions parallel Philby's ability to paralyse the British intelligence service. Haydon claims that, although he was recruited by Soviet intelligence at university in the 1930s, he only became a serious agent for them following the Suez crisis when it became clear to him that Britain was no longer a world power and, in his view, was subservient to America. This perceived inferiority led to Haydon developing a deep hatred for America and resolved him to damage them as much as possible by spying for the Russians.
Haydon was played by Ian Richardson in the 1979 television serial based on the novel.  In the 1988 BBC Radio 4 series, he was played by Edward de Souza.  In the 2011 film adaptation, he was played by Colin Firth. In the 2011 Radio 4 series, The Complete Smiley, he was portrayed by Michael Feast.
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