The British ambassador in Berlin was called in for a meeting at the German foreign ministry on Tuesday to explain allegations that Britain had been using its embassy to carry out covert electronic surveillance on Angela Merkel's government.

The meeting marked the latest fallout from the revelations of US and British espionage leaked by the former NSA contractor, Edward Snowden, and followed a report in the Independent about a covert listening post at the British embassy on Wilhelmstrasse, which the paper claimed to be based in part on the Snowden files.

If the report is confirmed, it could worsen British-German relations, which are already strained by a growing German sense that it has been marginalised by a global electronic espionage network led by the US and UK and confined to English-speaking states.

In a statement, the German foreign office said the head of its Europe division "had asked for a statement in response to the current reports in the British media and pointed out that intercepting communication from within diplomatic buildings represented a violation of international law".

A German official said: "We don't know anything about the report in the paper so the head of our Europe department was asking the ambassador about it. It is not an accusation. It is more of a clarification. We needed to know more."

In London, the Foreign Office confirmed that the ambassador, Simon McDonald, had a meeting with a senior official at the foreign ministry in Berlin "at his invitation", but offered no further comment.

The Independent reported that Britain has established a "spy nest" in the German capital. It described what it called "a potential eavesdropping base" on the embassy roof inside "a white, cylindrical tent-like structure" which had been there since the building was erected in 2000, and which it said bore a resemblance to devices used to intercept East German and Soviet communications during the cold war.

The paper said it had seen documents showing there were a small number of intelligence personnel operating in the embassy under diplomatic cover, their true mission apparently unknown to other staff.

Bernd Riexinger, co-chairman of the leftwing Die Linke party, said that if the allegations proved to be true, his party would call for an EU special summit to discuss possible financial sanctions against the UK.

"So far, Angela Merkel and her ministers have done their best to play down the allegations of surveillance through the NSA and GCHQ," he said. "But we've reached the stage where diplomatic ties with those countries are being severely strained. If industrial espionage has taken place, there need to be consequences."

Last week the German magazine, Der Spiegel revealed that the US embassy in Berlin had a structure on its roof that was used by a special unit of the National Security Agency (NSA) to monitor the mobile phone conversations of German officials, including Merkel, in nearby government buildings.

The report, also based on Snowden documents, led to a strongly worded phone call from Merkel to Barack Obama, and the summoning of the US ambassador to Berlin. British and German officials stressed that the response to the British report was milder – an "invitation" rather than a summons for McDonald. However the statement, issued on the instructions of the German foreign minister, Guido Westerwelle, used the verb gebeten, which means "asked" or "requested".

The issue has the potential to damage Berlin's relations with London in the same way as it has with Washington.

When asked whether David Cameron was concerned about the reasons for the invitation, his spokesman said: "We don't comment on intelligence questions".

The spokesman described the prime minister's relations with Merkel as excellent. "We have an excellent relationship with the German government and I believe that will continue."

German officials pointed out that it was illegal to use embassy premises to wiretap a host government, and the new report has deepened Berlin's sense of exclusion from the tight eavesdropping alliance known as Five Eyes, consisting of the US, UK, Canada, Australia and New Zealand. The Snowden files make it clear that membership of the club offered some protection against being spied on by another member. They also show that non-members are considered fair game for extensive surveillance, in the form of bulk monitoring of mass communications, and eavesdropping on the calls and emails of top officials.

The Snowden spy row has already disrupted complex US-EU negotiations on a new transatlantic trade and investment partnership, as European states have demanded data protection guarantees from US-based telecoms firms as a red line.

The US secretary of state, John Kerry said the trade deal "should not be confused with whatever legitimate questions exist with respect to NSA or other issues". On a visit to Poland, he said: "We want to hear from our allies, we want to have this conversation."

Electronic eavesdropping also triggered controversy on Tuesday in New Zealand, where the government narrowly succeeded in passing legislation obliging telecoms firms to give the country's security agencies access to their networks.