By Stephen Brown
BERLIN (Reuters) - Angela Merkel's government said on Monday that its cooperation with American intelligence was fully regulated by strict legal guidelines after a magazine reported that the U.S. National Security Agency was in close cahoots with German spies.
Germany's opposition, with an eye on September's election, when the chancellor will seek a third term, demanded that her government explain how much it knew about U.S. surveillance tactics ahead of talks with Washington about the NSA.
"In the light of the latest media reports, it is even more urgent to ask what Germany's secret services and above all what the Chancellery knew about eavesdropping activities," said the Social Democrats' (SPD) chancellor candidate, Peer Steinbrueck.
Der Spiegel's report that the NSA works with Germany and other Western states on a 'no questions asked'-basis undermines the chancellor's indignant talk of "Cold War" tactics revealed by former NSA contractor Edward Snowden.
"They are in bed with the Germans, just like with most other Western states," Snowden said in an interview in Der Spiegel.
"Other agencies don't ask us where we got the information from and we don't ask them," he said. "That way they can protect their top politicians from the backlash in case it emerges how massively people's privacy is abused worldwide."
Germany has publicly demanded explanations for Snowden's allegations of large-scale spying by the NSA, and by Britain via a program codenamed 'Tempora', on their allies including Germany and other European Union states, as well as EU institutions and embassies.
Merkel's spokesman Steffen Seibert told a news conference that talks between European Union and U.S. experts starting in Washington on Monday, in parallel to transatlantic free trade talks starting this week, should clarify the NSA's activities.
"The Federal Intelligence Agency (BND) cooperates within its legal framework with partner agencies, including for decades the NSA," he told a news conference. The BND is Germany's main overseas intelligence agency.
"In the fight against terrorist threats, we can only protect the population if we cooperate with others. This cooperation takes place within strict legal and judicial guidelines and is controlled by the competent parliamentary committee," he said.
Merkel has said Germany has avoided terrorist attacks thanks to tip-offs from its allies, while at the same time saying that U.S. and British snooping on close EU allies, if confirmed, would be unacceptable "Cold War" methodology.
She has spoken directly with President Barack Obama about the reports that the United States has bugged electronic communications and institutions in Germany and elsewhere in the EU, and is sending her interior minister to Washington this week.
Intelligence agencies are coordinated by Merkel's office and overseen by a parliamentary committee, whose deliberations - including testimony about the NSA from the head of the BND last week - are secret. Germany's domestic spy agency has said it did not know about such extensive U.S. and British eavesdropping.
But the opposition insists that Merkel or her chief of staff Ronald Pofalla, who coordinates the secret services, must have known more.
"The citizens of our country should be able to trust in the secret services respecting the law and their rights," said Steinbrueck. "All the facts must be put on the table."
(Additional reporting by Hans Edzard Busemann; Writing by Stephen Brown; Editing by Kevin Liffey)