The spiralling scandal over mass US surveillance of digital communications has moved to the top of European politics for the first time , with the EU's two key leaders, Angela Merkel and François Hollande, seeking a joint response to the spying claims.

With Germany and France reeling from allegations this week that the US National Security Agency tapped Merkel's mobile phone and intercepted the calls and text messages of millions in France, an EU summit in Brussels was forced to grapple with the issue on Thursday.

The Germans made plain that they were unhappy with the White House response to the tapping allegations following a 20-minute phone call between Merkel and Barack Obama on Wednesday.

"Spying on friends is not on at all," Merkel said going into the summit in her first public comment on the row.

In Berlin, the German foreign minister, Guido Westerwelle, summoned the new US ambassador, John Emerson, to demand answers. The foreign ministry said German views would be presented "in no uncertain terms".

After seeing the ambassador, Westerwelle said: "We need the truth now".

Merkel's chief of staff, Ronald Pofalla, who is responsible for overseeing the German intelligence services, signalled that Berlin had delivered an ultimatum to Washington.

He said Germany had insisted that it wanted answers to all questions still open, and a new "no spy agreement" between Berlin and Washington which would regulate intelligence co-operation and exclude mutual espionage. All information supplied by the NSA in recent months in response to the scandal was being reviewed.

Pofalla said a White House statement on Wednesday that Merkel's phone was not being tapped did not represent a denial that it had been tapped in the past. If the strong German suspicion was confirmed, he said, "it would shed new light on all the information from the NSA in recent weeks and recent months".

Merkel and Hollande met separately at the EU summit to discuss the issue. Senior French sources said they agreed to co-ordinate their responses to the US.

The EU came under strong pressure to act by fast-tracking draft rules regulating how digital data can be transferred between Europe and America, amd curbing the ability of big US internet providers and social media corporations to keep European data freely in America and make it available to the NSA.

France and the European commission led the push for new European legislation on data protection by next spring, while Britain dragged its heels, arguing tjat it was more important to get the complex legislation right than to rush it through.

"The UK is leading the charge against it," a senior EU official said. "The UK position is bewildering. They're trying to delay it."

A French paper prepared for the summit, and obtained by the Guardian, said the NSA's operation of the Prism programme, revealed in June, "brought to light the need to strengthen the rules ensuring the protection of the privacy of European citizens. An agreement needs to be achieved in October on the main provisions of the data protection package."

German confidence that its security service had proof of US tapping of the chancellor's mobile sparked anger and outrage across the political spectrum, as well as strong criticism of Merkel's perceived complacency on the issue in the months since the Guardian first revealed the activities of the NSA and of Britain's General Communications Headquarters (GCHQ) in June.

Sigmar Gabriel, the German Social Democrats leader, and Martin Schulz, the president of the European parliament and also a German Social Democrat – who are both engaged in negotiating a coalition government with Merkel's Christian Democrats – called for the recently launched US-EU trade talks to be frozen until Washington delivered satisfactory answers on the espionage claims.

"There are certain standards and criteria that need to be met, otherwise there is no point in talking to one another," Schulz said.

Viviane Reding, the EU commissioner for justice and the loudest advocate in Brussels of a new digital rulebook governing how personal data is handled, went further than the French.

"Europe's heads of state and government must follow words with action," she said. "They should commit to adopting the EU data protection reform by spring 2014. This would be Europe's declaration of independence. Only then can Europe credibly face the United States. Europe needs to stand tall and united with one law … We now need big European rules to counter big listening ears."

While the summit could decide to push ahead with the data privacy rules, it is unlikely to take more than symbolic action on the phonetapping and interception claims since the EU has no powers over national security and no authority over intelligence activities.

Such issues would need to be regulated through bilateral or multilateral agreements between the US administration and individual European governments. Germany is calling for transatlantic security and intelligence service activities and co-operation to be put on a new legal footing and are voicing exasperation with perceived US foot-dragging and the refusal to deliver clear answers to questions arising from the disclosures.

The German interior minister, Hans-Peter Friedrich, demanded an apology from the US. Until this week he has been the foremost figure in the German government belittling the impact of the NSA revelations and ascribing the furore to media hyperbole.

The stakes appear to be getting higher. This week the European parliament agreed on a new draft data protection regime which still needs to be negotiated with member states. It has also called for a freeze of transatlantic pacts aimed at tracking terrorism. The damage being done to US-European trust is clearly increasing.

Thomas de Maiziere, the German defence minister and a Merkel confidante, said he expected his phone to be tapped by several countries, but: "I didn't expect the Americans".

While Berlin is more stridently demanding prompt and full answers from Washington, a senior German government source also said it was seeking information from the British, given the intimate involvement of GCHQ in the scandal.

Berlin was having "ongoing discussions with the American and also the British authorities" about the extent of NSA and GCHQ surveillance programmes, the source said.

This predated Wednesday's revelations, but talks were likely to intensify over the coming days. "From the very beginning, the federal government has made clear that we need to talk to our American and British partners," the source said.