President Obama told Chancellor Merkel on the phone that he did not know he/the U.S. was bugging her phone. Today, Bild am Sonntag reports that NSA head Keith Alexander personally told Obama in 2010 that NSA was bugging Merkel's phone.

“Obama did not stop the action at that time but allowed it to continue,” a US intelligence source close to the NSA operation told the Sunday newspaper.

The White House later commissioned an extensive NSA dossier about Mrs Merkel, according to Bild.

Information about Mrs Merkel was collated in the US Embassy beside the Brandenburg Gate in Berlin and sent directly to the White House.