European leaders warned on Monday that claims the U.S. National Security Agency (NSA) bugged European Union (EU) offices and hacked into its computer network could derail major trade talks, as the controversy over U.S. spying snowballed.
Germany's foreign ministry summoned the U.S. Ambassador to seek clarification and German Chancellor Angela Merkel will also discuss the issue with President Barack Obama, her spokesman said.
(Read More: US Bugged EU Offices, Hacked Into Its Computers)
"If it is confirmed that diplomatic representations of the European Union and individual European countries have been spied upon, we will clearly say that bugging friends is unacceptable," Merkel's spokesman said.
"We are no longer in the Cold War."
Reports published over the weekend by The Guardian newspaper and Germany's Der Spiegel, claimed the NSA had run an extensive program to spy on the EU representative's office in Washington as well as the EU office to the United Nations in New York. Der Spiegel also reported one spying operation had targeted an office that housed the EU Council of Ministers in Brussels.
The revelations threatened to derail an EU-U.S. free trade deal worth billions of dollars.
France's President Francois Hollande said Europe would hold off on any negotiations with the U.S. on the trade deal, until it was sure the U.S. spying had ended.
"There can be no negotiations or transactions in all areas until we have obtained these guarantees, for France but also for all of the European Union," Hollande said.
In a strongly worded statement, the chairman of the European Parliament's Economic and Monetary Affairs Committee said the spying allegations were a "disaster" ahead of the trade talks.
"Upcoming EU-U.S. trade talks will certainly be under strain in the wake of this scandal. There will be an enormous elephant in the room which will be impossible to ignore," said Chairman Sharon Bowles.
"I will be leading a delegation of my Committee to the U.S. in a couple of weeks and the issue of bugging is bound to come up. The last time I was in Washington I was briefed in a coffee shop, although this was due to a very early start. That said, it might now be safer to conduct all our business in coffee shops."
Stephen Booth, the research director of Open Europe, an influential think tank, said the politics of the issue could well be significant for the trade talks.
"Some of the EU countries allegedly targeted by U.S. agencies, such as France for example, have already been resistant to opening up trade in certain sectors and this could harden their stance in those talks."
But in a sign the allegations have not yet derailed the trade deal, European Commission (EC) spokesperson Pia Ahrenkilde Hansen said that rather than concentrating on the trade deal's future, the EC was "looking for a clear statement from our U.S. partners."
"These are disturbing reports if proven true and they demand full clarification," she said, adding that the EU's foreign policy chief, Catherine Ashton, had spoken to U.S. Secretary of State John Kerry about the allegations.
In the meantime, the president of the European Commission, Jose Manuel Barroso, has also ordered an "ad-hoc" security sweep of European premises and computer programs.