The Kremlin gifted bugged presents to the heads of state at a G20 meeting in St Petersburg in a spying effort that echoed the worst excesses of the Cold War and was reminiscent of Hollywood spy movies.
Italian media reported that at the September summit leaders of the world's most powerful nations including Barack Obama and David Cameron, and their staff, were handed a welcome pack that included USB flash-drives and universal mobile phones battery chargers, which were actually spying devices.
The alert was reportedly raised by the EU Council president, Herman van Rompuy. As revelations by US whistleblower Edward Snowden on the NSA snooping activities rocked the diplomatic world the technology gifts reportedly raised Van Rompuy's suspicion.
At the EU headquarters in Brussels, Van Rompuy had the welcome pack analysed by security experts, who sought help from the German intelligence services.
The analysis revealed that the USB drives and the battery chargers were bugging devices.
"The USB flash-drives and the power cables are suitable for use as secret tapping devices able to gather computer and mobile phones data," Il Corriere della Sera quote the report saying.
The report was forwarded to all the G20 members' intelligence services, urging them to "adopt any precaution in the event the devices had been used".
Photos of the USB drives and battery chargers all sporting the Russia G20 logo were posted by La Stampa, which described the welcome pack as a "Trojan horse."
Vladimir Putin's spokesperson Dmitri Peskov denied the allegations
"This is a clear attempt to divert attention from a real problem: the US spying activities," Peskov told Ansa news agency.
The EU Council refused to comment but sources in Brussels told IBTimes UK that the EU and its member states often cooperated to thwart spying attempts.
"The General Secretariat of the council is of course aware of espionage risks and puts in place regularly updated/upgraded measures to protect its infrastructure against threats, including telephone and IT system," sources said. "In so doing, it cooperates closely with other EU institutions and with member states."
St Petersburg's G20 was dominated by the Syrian crisis but the NSA scandal and the US scooping activities were also high on the agenda.
Diplomatic tension was particularly high between Obama and Putin after Russia granted Snowden temporary asylum.
Putin is a former KGB agent and before becoming president was the head of the successor of Russia's Soviet era intelligence agency, the FSB.