Edward Snowden, the fugitive former US intelligence operator, has leaked what is claimed to be a confidential memo showing the US National Security Agency (NSA) encouraged senior officials in departments such as the White House, the State Department and the Pentagon to provide access to their "Rolodexes" containing phone numbers of leading foreign politicians.
One US official alone was said to have passed on 200 numbers, including those of the 35 world leaders, none of whom is named, who were immediately "tasked" for monitoring by the NSA.
The disclosure will heighten the tensions between the US and key European allies, after the German chancellor Angela Merkel challenged President Barack Obama over claims the Americans tapped her mobile phone.
French president Francois Hollande had earlier called Mr Obama to confront him over claims that the NSA was targeting the private phone calls and texts of millions of French people.
In a carefully worded statement, the White House said the US "is not monitoring and will not monitor" Mrs Merkel's commun-ications but officials in Berlin pointed out that it did not deny monitoring the phone in the past.
The latest NSA memo obtained by a newspaper, dated October 2006, was issued to staff in the agency's Signals Intelligence Directorate (SID) and describes how US officials who mixed with world leaders and politicians could help agency surveillance.
"In one recent case a US official provided NSA with 200 phone numbers to 35 world leaders," it notes. "Despite the fact that the majority is probably available via open source, the PCs [intelligence production centres] have noted 43 previously unknown phone numbers. These numbers plus several others have been tasked."
The document also describes how the numbers provided the NSA leads to further telephone numbers which were also "tasked", but admits that the surveillance had produced "little reportable intelligence".
The memo then asks experts to consider any customers who may be interested in giving over details of their contacts.
It adds that the success of the operation had led the intelligence officers to wonder if there are more "NSA liaisons" whose "supported customers" may consider handing over "Rolodexes" or phone lists with NSA as potential sources of intelligence. It added that such information would be welcomed.
It goes on to suggest that such offers come unsolicited, with US customers sometimes spontaneously offering up their overseas networks to the agency.
Earlier, it was reported that the US had denied ever spying on Prime Minister David Cameron.
Caitlin Hayden, a spokesman for the National Security Council said: "We do not monitor PM Cameron's communications."
Asked if the US had ever spied on Mr Cameron in the past, she replied: "No."
Mr Cameron's spokesman refused to comment, saying: "I'm not going to comment on matters of security or intelligence."
Britain, the US, Canada, Australia and New Zealand are members of the so-called Five Eyes group, who share signals intelligence and are supposed not to spy on each other.