US denies German media claims that Barack Obama knew NSA was spying on Angela Merkel's phone

Trying to contain a spying-on-friends scandal, Washington has denied reports in the German media that President Barack Obama knew about surveillance of Chancellor Angela Merkel’s mobile phone and did not stop it.

The rift between the two allies threatened to worsen as German publications said the surveillance of Ms Merkel had been going on for a decade and that Mr Obama has known since 2010. Anger over the affair has prompted demands from leading German politicians that Berlin should abandon negotiations over a EU-US free trade agreement until it is resolved.

“We should put the free-trade talks on ice until the allegations against America’s National Security Agency have been answered,” noted Ilse Aigner, Bavaria’s conservative Economics Minister, echoing calls by Sigmar Gabriel, the Social Democrat leader.

As the explosive reports surfaced last Wednesday, the Chancellor made an angry personal phone call to Mr Obama, who is said to have apologised and told her he had not known it was happening. Der Spiegel said he had told her he would have stopped it if he had known.

But a report in Sunday’s Bild am Sonntag newspaper flatly contradicted the suggestion that Mr Obama had not known. The paper quoted US intelligence sources as saying that in 2010 General Keith Alexander, director of the National Security Agency, NSA, had personally briefed Mr Obama about the phone tapping operation which targeted Ms Merkel. “Obama did not halt the operation, but rather let it continue,” the newspaper quoted a senior NSA source as saying. Ms Merkel’s number was said to have been on a NSA surveillance list into 2013.

But in a statement on Sunday night, the NSA denied the Bild report. Gen. Alexander, “did not discuss with President Obama in 2010 an alleged foreign intelligence operation involving German Chancellor Merkel, nor has he ever discussed alleged operations involving Chancellor Merkel. News reports claiming otherwise are not true,” it said.

Der Spiegel magazine reported that the NSA had set up a listening post in Berlin’s heavily fortified American embassy, from which it had monitored Ms Merkel’s mobile phone calls. It said the surveillance was run by a unit called the Special Collections Services and began in 2002, three years before she became leader.

The magazine said the unit monitored all communications in the German capital’s government quarter, which is less than 300 yards away from the US embassy near the Brandenburg Gate. It said the NSA ran similar units at 80 locations worldwide, including 19 European cities.

Berlin will send senior intelligence chiefs to Washington this week in an attempt to “push forward” an investigation into the NSA’s German surveillance operation, which was first reported in leaked US intelligence documents last June. More that 60 million German calls were said to have been monitored in a single day.