Germany, one of the countries primarily targeted through the surveillance programmes of the US National Security Agency, is planning to strengthen its capabilities to prevent snooping.
German intelligence officials told reporters in a press briefing that the country lacks sufficient technology to effectively monitor electronic surveillance, and it would seek more funds to equip technology with boosted counterespionage capabilities.
The officials would work more closely with universities and employ more information-technology specialists for the purpose.
"We could presume that they had the technological ability" to spy on Germany, an intelligence official said.
"We never knew that the Americans would actually do it."
NSA Taps Merkel's Cellphone
Germany's plan comes in response to revelations that the NSA had tapped Chancellor Angela Merkel's cellphone.
Edward Snowden, a former contractor at the NSA, had earlier leaked top secret documents about a global programme of surveillance by Washington. He is currently in exile in Russia.
The documents revealed that the NSA has been tapping telephone conversations and spying on the internet activity of citizens, leaders, bureaucrats, businesses and government agencies.
The German government said it had obtained information that US agencies may have hacked the German chancellor Angela Merkel's mobile phone.
The revelations soured the relations between the US and the European Union and threatened the progress of the Transatlantic Trade and Investment Partnership, which is designed to drive growth and create jobs in both economies.
Merkel sought explanation from US President Barack Obama for what Germany said was a "serious breach of trust" between the allies. She said Germany wants talks with the US over Washington's alleged snooping activities and urged the US to agree a "no-spying" deal.
Subsequently, the US promised not to spy on Merkel's phone in the future but it did not deny doing the same in the past.
German state-backed Deutsche Telekom had reportedly been looking to unite other communications companies in the country in a bid to build a secure local internet system to shield its citizen's internet activity from foreigners.
Reuters reported that Deutsche Telekom, which is 32%-owned by the German government, wanted to keep German web traffic within the country.
The proposal has the backing of Germany's telecoms regulator, but it would not be easy to execute; it would face technical and legal hurdles, as all the servers would have to be hosted within the country.