The US National Security Agency monitored the telephone conversations of 35 world leaders after obtaining their numbers from an official in another government department, according to a leaked document from the former US intelligence operative Edward Snowden.
The Guardian reports that a confidential memo shows the NSA encouraged senior officials in departments such as the White House, the State Department and the Pentagon to provide access to their "Rolodexes" containing the 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 has earlier called Mr Obama to confront him over allegations 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 communications but officials in Berlin pointed out that it did not deny monitoring the phone in the past.
The latest NSA memo obtained by The Guardian, 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".
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 told the Daily Telegraph: "We do not monitor PM Cameron's communications."
Asked if the US had ever spied on Mr Cameron in the past, she replied: "No."
The Prime Minister's official spokesman refused to comment, saying: "I'm not going to comment on matters of security or intelligence."
Britain and the US - along with 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.