Bild am Sonntag newspaper said that 320 political and business leaders in Germany were being monitored by the US National Security Agency (NSA), including Interior Minister Thomas de Maiziere.
"We have the order not to allow any loss of information whatsoever after the communication of the chancellor no longer being able to be directly monitored," Bild quoted an unnamed high-ranking US intelligence employee in Germany as saying.
US-German ties soured amid revelations leaked by former CIA contractor Edward Snowden that US intelligence agencies had allegedly eavesdropped on Merkel and collected vast amounts of online data and telephone records from average citizens.
Bild also quoted US National Security Council spokeswoman Caitlin Hayden as saying that the administration had made clear the US gathers the same kind of intelligence as all advanced nations.
Also Read
US intelligence gathering is not aimed at helping US companies gain a competitive advantage, she was also quoted as saying.
The report sat awkwardly alongside an interview with German Foreign Minister Frank-Walter Steinmeier, published in Spiegel magazine today, in which he expressed his belief that the United States had learned its lesson about spying on allied countries.
"Washington has hopefully understood that the type of contact with its partners can also have a political price," Spiegel quoted Steinmeier as saying in response to a question about US surveillance of Germans.
"I am sure that surveillance of the political leadership of friendly states is finished.