According to German Bild am Sonntag newspaper, which cited US intelligence sources, National Security Agency chief Keith Alexander briefed Obama on the bugging operation against Merkel in 2010.
"Obama did not halt the operation but rather let it continue," an unnamed high-ranking NSA official told the newspaper.
Moreover, the paper said, the US president later ordered the NSA to prepare a comprehensive dossier on Merkel.
The report adds that NSA was listening in to the chancellor’s both work phone provided by her political party, and supposedly her secure phone that she only received this summer. This, the paper said, is evidence that the operation continued until the "immediate past."
NSA spy activity was reportedly conducted on the fourth floor of the US Embassy in central Berlin, just a stone’s throw from the German government’s headquarters.
The NSA's findings, SMS messages and phone calls, were directly reported to the White House in Washington, unlike as usual to NSA headquarters in Fort Meade, Maryland, the paper’s source said.
Earlier this week Berlin said that Merkel's communications were "absolutely safe," since she was conducting her important "state political" conversations on encrypted fixed-circuit phone lines. This secure landline phone in her office is allegedly the only one that NSA did not have access to, according to Bild am Sonntag.