Edward Snowden
Edward Snowden leaked documents showing theUS security body NSA spied on EU institutions and citizens (Reuters)

Britain's government has warned the European Union not to squander "once-in-a-lifetime" trade talks with the US after Edward Snowden's National Security Agency spying revelations.

France demanded a temporary suspension to landmark EU-US trade talks, which were arranged at the G8 summit in Northern Ireland, because it is angry about the NSA's surveillance of EU states, including itself, Germany, and Britain.

However, the European Commission (EC) stepped in and helped to appease the French government by offering to set up discussions and working groups on the NSA's spying activities in parallel with trade talks.

The trade agreement is potentially worth $100bn (£65.5bn, €77bn) a year to both parties..

"As set out by the European Commission, single or specific issues should not delay what is a collective EU-wide process," a Department for Business spokeswoman told IBTimes UK.

"A EU-US free trade agreement is a once-in-a-lifetime opportunity to liberalise trade between the world's two largest trading blocs and drive growth across the UK, Europe and US. It's vital that we don't let this opportunity slip."

Jose Manuel Barroso, EC president, said that EU-US trade negotiations "are and will remain a top priority".

"In parallel, it is important to address concerns that have been clearly expressed on the European side on some intelligence activities and also on the implication for privacy and data protection," Barroso said at a press conference.

The NSA-EU spying scandal was broken by German newspaper Der Spiegel. US citizen and former NSA staffer Snowden, who is on the run from American authorities wanting to charge him with espionage, leaked documents revealing that the agency's spooks targeted European citizens and EU institutions.

European Parliament President Martin Schulz expressed anger after the details came to light.

"I feel treated as a European and a representative of a European institution like the representative of the enemy," he said.

"Is this the basis for a constructive relationship on the basis of mutual trust? I think no. Therefore my first request to the Embassy of the United States here in Brussels is 'Is it true?' and in case it is true 'Why?' They should justify.

"We are just starting negotiations of a free trade agreement between the European Union and the United States. This is not the basis to build mutual trust, this is a contribution to build mutual mistrust and therefore I understand all those in Europe who think that we should first of all ask the Americans, secondly look to or listen to the justification and then take the necessary consequences.

"On the other hand, with this affair or not, the United States of America and Europeans remains to be strategic allies. Therefore it is shocking that the United States take measures against their most important and nearest allies, comparable to measures taken in the past by the KGB, by the secret service of the Soviet Union."