By Sabine Siebold
BERLIN (Reuters) - Angela Merkel's chief of staff said on Monday that fears of mass U.S. spying on Germans were unfounded, hoping to end a controversy that threatened to damage the chancellor as she seeks re-election next month.
Media reports of the U.S. National Security Agency's (NSA) electronic spying operation enraged Germans and put Merkel and her officials on the defensive when pressed to explain what, if anything, they knew.
Emerging from the latest in a series of confidential hearings by a parliamentary committee, Ronald Pofalla, responsible for Germany's intelligence agencies, said talks last week in Washington and London had brought clarity and the assurances Berlin wanted.
"The NSA and the British intelligence agency have assured us they uphold German law in Germany, as indeed do Germany's foreign intelligence agency and the domestic intelligence agency," Pofalla said.
In June the United States confirmed the existence of an operation codenamed Prism, after ex-NSA contractor Edward Snowden revealed data mining of users of Google, Facebook, Skype and other U.S. companies.
Since June, a stream of new allegations - that the British were also spying and that German agents were in cahoots with their foreign peers - had kept public anger simmering.
"The allegation of a supposed blanket surveillance in Germany is now, after information given by the NSA, British intelligence and our intelligence forces, off the table," Pofalla said.
"In Germany there are no infringements of fundamental rights by the millions, as has been continuously, falsely alleged," he added.
Pofalla said that cooperation between intelligence agencies was essential and that data acquired by German spies had stopped 3-4 attacks per week on troops in Afghanistan, and 19 attacks against German soldiers since January 2011.
He added the NSA had offered to strike a "no spy deal" with the Germans, which would be explored. He did not elaborate on what such a deal might entail.
Thomas Oppermann, an opposition Social Democrat who chairs the committee, called the offer a "face-saving confession" by the United States which in itself showed that surveillance had taken place.
Merkel's conservatives are still tipped to win the September 22 federal election, with opinion poll ratings at 41 percent, some 16 points ahead of the SPD. It is less clear whether Merkel can renew her center-right coalition with the Free Democrats (FDP), who are on just 5 percent.
(Writing by Alexandra Hudson; Editing by Robin Pomeroy)