Identifying the microscopic origins of decoherence sources prevalent in Josephson junction based circuits is central to their use as functional quantum devices. Focussing on so called "strongly coupled" two-level defects, we construct a theoretical model using the atomic position of the oxygen which is spatially delocalised in the oxide forming the Josephson junction barrier. Using this model, we investigate which atomic configurations give rise to two-level behaviour of the type seen in

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... ents. We compute experimentally observable parameters for phase qubits and examine defect response under the effects of applied electric field and strain.