The Obama administration is considering ending spying on allied heads of state, as the White House grapples with the fallout from revelations that the US has eavesdropped on German Chancellor Angela Merkel.
A senior administration said late last night that a final decision had not been made and an internal review was still underway.
The revelations about National Security Agency (NSA) monitoring of Mrs Merkel were the latest in a months-long spying scandal that has strained long-standing alliances with some of America’s closest partners.
Earlier yesterday, Senator Dianne Feinstein, chairwoman of the Senate Intelligence Committee, called for a “total review of all intelligence programmes”.
She said the White House had informed her that “collection on our allies will not continue”.
The administration official said that statement was not accurate, but added that some unspecified changes had already been made and more were being considered, including terminating the collection of communications from friendly heads of state.
The official was not authorised to discuss the review by name and insisted on anonymity.
As a result of the spying allegations, German officials said yesterday that the US could lose access to an important law enforcement tool used to track terrorist money transfers.
As possible leverage, German authorities cited last week’s non-binding resolution by the European Parliament to suspend a post-9/11 agreement allowing the Americans access to bank transfer data to track the flow of terrorist money.
A top German official said she believed the Americans were using the information obtained from Mrs Merkel to gather economic intelligence apart from terrorism and that the agreement known as SWIFT should be suspended.
Ms Feinstein said while the intelligence community has kept her up to date on other issues, like the court orders on telephone record collection, intelligence officials failed to brief her on how they followed foreign leaders.
Her statement follows reports based on new leaks from former NSA systems analyst Edward Snowden indicating that the NSA listened to Mrs Merkel and 34 other foreign leaders.
“With respect to NSA collection of intelligence on leaders of US allies - including France, Spain, Mexico and Germany – let me state unequivocally: I am totally opposed,” Ms Feinstein said.
She added that the US should not be “collecting phone calls or emails of friendly presidents and prime ministers” unless in an emergency with approval of the president.
EU officials who are in Washington to meet politicians ahead of White House talks said US surveillance of their people could affect negotiations over a US-Europe trade agreement. They said European privacy must be better protected.
As tensions with European allies escalate, the top US intelligence official declassified dozens of pages of top secret documents in an apparent bid to show the NSA was acting legally when it gathered millions of Americans’ phone records.
Director of National Intelligence James Clapper said he was following the president’s direction to make public as much information as possible about how US intelligence agencies spy under the Foreign Intelligence Surveillance Act.
Yesterday’s release of documents focused on Section 215 of the Patriot Act, which allows the bulk collection of US phone records.
Asked yesterday if the NSA intelligence gathering had been used not only to protect national security but American economic interests as well, White House spokesman Jay Carney said: “We do not use our intelligence capabilities for that purpose. We use it for security purposes.”
But National Security Council spokeswoman Caitlin Hayden later clarified: “We do not use our intelligence capabilities to give US companies an advantage, not ruling out that we are interested in economic information.”