French President Francois Hollande has told the United States to immediately stop spying on European institutions after reports of covert US surveillance of EU diplomatic missions.

According to the German magazine Der Spiegel microphones were installed at the EU mission in Washington and the computer network was infiltrated giving the agency access to e-mails and internal documents.

The article which was printed over the weekend revealed that US whistleblower Snowden obtained confidential documents which outlined how microphones were installed in EU buildings in Brussels and Washington, and e-mails and internal documents were accessed.

Reports in The Guardian today says the US also targeted the Washington embassies of France, Italy and Greece are likely to further strain relations. The allegations are the latest spying claim attributed to fugitive intelligence analyst Edward Snowden.

The European Justice Commissioner Viviane Reding has warned that talks to create what would be the world's biggest free trade area, formally launched earlier this month, could be jeopardised if the bugging allegations proved true.

Mounting calls for explanation

European Parliament President Martin Schulz has demanded a full and speedy clarification from Washington.

He said "I am deeply worried and shocked about the allegations of US authorities spying on EU offices. If the allegations prove to be true, it would be an extremely serious matter which will have a severe impact on EU-US relations."

In a statement the European Commission said "We have immediately been in contact with the US authorities in Washington DC and in Brussels, and have confronted them with the press reports".

A long-awaited trade deal between the EU and the US could be in jeopardy over the allegations.

Fine Gael MEP Gay Mitchell is calling on the US Ambassador to the EU to make a statement to the European Parliament on the reports. Mr. Mitchell says it is imperative that the US respond to the allegations urgently.

However he says talks scheduled on a new EU-US free trade deal will go ahead.