Germany has expelled the top US intelligence official in Berlin from the country after two men were investigated on suspicion of spying for Washington.
"The representative of the US intelligence services at the United States embassy has been asked to leave Germany," government spokesman Steffen Seibert said.
"The request occurred against the backdrop of the ongoing investigation by federal prosecutors as well as the questions that were posed months ago about the activities of US intelligence agencies in Germany."
"The government takes the matter very seriously," Seibert added.
The move came as a 31-year-old man, believed to be a German intelligence operative, was arrested on suspicion of spying for a foreign power last week.
German media reported the suspect was an employee of the Bundesnachrichtendienstor BND ‒ Germany's equivalent of the American CIA who worked as a double agent for the US.
He had allegedly been paid by Washington to provide information about a German parliamentary committee set up to investigate what kind of spying activities were being carried out by the US and other intelligence agencies in Germany.
Earlier this week, federal prosecutors said police raided the house and the office of a second man also suspected of collecting intelligence for another country.
Again, local media identified the man as an employee of Germany's ministry of defence, who was also on the payroll of the CIA. No arrest was made in this case.
Interior minister Thomas de Maiziere said: "If the situation remains what we know now, the information reaped by this suspected espionage is laughable."
"However, the political damage is already disproportionate and serious."
The two spy cases have soured diplomatic relations between Berlin and Washington, which had already been affected by allegations by NSA whistleblower Edward Snowden that the US government tapped Chancellor Angela Merkel's phone.
Shortly before the decision to expel top US intelligence official in Berlin was made public, Merkel described the German and American approach to the role of intelligence agencies as "very different" and stressed the need for greater trust between allies.