A final decision had not yesterday been made, according to one security source.
The administration is trying to repair damage from the months-long scandal – including the most recent disclosure that the National Security Agency monitored the communications of German Chancellor Angela Merkel who demanded an explanation from the US president whom she telephoned directly in response to the revelations last week.
President Barack Obama said the government was conducting “a complete review of how our intelligence operates outside the country.”
Senator Dianne Feinstein, chairwoman of the Senate Intelligence Committee, said the White House had told her that “collection on our allies will not continue.”
The security source said that was not accurate, but added some unspecified changes already had been made and more were being considered, including terminating the collection of communications from friendly heads of state.
Reports based on latest leaks from former NSA systems analyst Edward Snowden indicate 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 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.
In response to the revelations, German officials said that the US could lose access to an important law enforcement tool used to track terrorist money flows.
Other allies have also expressed their displeasure about the US spying. Spain’s prosecutor’s office said it has opened a preliminary inquiry to determine whether a crime was committed by NSA surveillance.
As possible leverage, German authorities cited last week’s non-binding resolution by the European Parliament to suspend a post-September 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 to gather economic intelligence apart from terrorism and said the agreement, known as the SWIFT agreement, should be suspended.
European Union 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, and said European privacy must be better protected.
Many officials in Germany and other European governments have made clear, however, they do not favour suspending the US-EU trade talks which began last summer because both sides stand to gain so much.
Amid tensions with European allies, director of national intelligence James Clapper 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.
He 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.
Meanwhile, claims emerged that Russia’s secret service tried to spy on world leaders at last month’s G20 summit by handing out USB sticks containing a “Trojan horse” programme so sensitive documents on laptops could be accessed. Italian media said heads of state and other delegates were given the devices at the acrimonious meeting in St Petersburg.
Spies out in cold: Page 15.