French President Francois Hollande has said allegations that the US bugged European embassies could threaten a huge planned EU-US trade deal.
Meanwhile, Russian and US security agencies are reportedly discussing how to deal with the man behind the leaks.
Former CIA-analyst Edward Snowden is believed to be at an airport in Moscow, seeking a destination safe from the US where he is wanted for prosecution over the leaking of thousands of classified documents.
Russia’s President Vladimir Putin and US’s President Barack Obama have ordered the chiefs of their respective agencies, FSB and FBI, to find a way out of the impasse, a senior Russian official said.
The allegations that US security services bugged EU missions and the embassies of friendly European countries – including the French, Italian and Greek embassies – were published at the weekend by Der Spiegel in Germany and the Guardian in Britain
At one level European leaders can hardly be surprised that US security agencies were spying upon them. Most governments spy on each other – whether friendly or not.
The problem though here is three-fold. Firstly the very public disclosure of what has been going on; secondly the level of detail; and thirdly the scale and scope of the US operation. This appears to have genuinely shocked EU leaders.
The revelations will inevitably influence the climate of negotiations for the new US-EU trade deal. Such an agreement is good news for both sides and is unlikely to be jeopardised President Hollande’s threat notwithstanding. But reaching a deal in this new context could be much harder.
Talks over the EU-US pact, the biggest bilateral deal ever negotiated, are due to start in Washington DC on 8 July.
France only cleared the way for the talks in mid-June, after EU members accepted its demand to shield movies and online entertainment from the might of Hollywood and Silicon Valley.
But France’s President Hollande signalled on Monday that the negotiations could be further delayed if the US cannot give a guarantee it had ended its surveillance of the EU.
Edward Snowden has been charged in the US with theft of government property, unauthorised communication of national defence information and wilful communication of classified communications intelligence.
He left Hong Kong after revealing his identity, and is reportedly staying at an airport hotel in Moscow from where he has applied for asylum in Ecuador.