Germany has dropped an investigation into allegations Chancellor Angela Merkel's phone had been tapped by the US National Security Agency (NSA).

German federal prosecutors said they have closed the inquiry into whether the US had been listening in on Merkel's mobile phone – used for party political business – due to lack of evidence.

Merkel described the allegations as a "serious breach of trust" when she confronted US President Barack Obama over the claims, which emerged in the wake of the leaking of thousands of secret documents by NSA whistleblower Edward Snowden.

German prosecutors admitted in December that the investigation was not going well, with chief prosecutor Harald Range saying they had been unable to uncover any actionable evidence.

Range has now confirmed the investigation has been closed after a year as they have no evidence proving the alleged spying and any previous documents which were published in the media would not stand up in court.

The allegations of phone tapping were previously denied by White House spokesman Jay Carney. He said at the time: "All I can tell you is what the president told the chancellor - the US– is not monitoring and will not monitor the communications of the chancellor."