A proposal to lay an undersea cable between Portugal and Brazil to circumvent US snooping has been praised by Brazilian President Dilma Rousseff.

Rousseff on Monday (25 February) in Brussels at the annual EU-Brazil summit told reporters that privacy, human rights, and the sovereignty of nations must be respected.

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Brazilian President Dilma Rousseff wants an undersea cable to Europe

"The internet is one of the best things man has ever invented. So we agreed for the need to guarantee ... the neutrality of the network, a democratic area where we can protect freedom of expression," she said.

Brazilian state-owned telecom provider Telebra is reported to have cut a deal last month with Spain's IslaLink’s Submarine Cables to lay the €134 million cable.

The plan is to reroute Brazil’s internet traffic, which currently passes through a network access point in Florida, away from the US altogether.

Work is set to commence over the summer. Brazil is expected to pay most of the bill, reports Reuters.

The EU, for its part, back the plans.

"We welcomed the plans for the future installation of a fibre-optic submarine cable linking Brazil and Europe, which will improve communications between the two continents," said the EU Council, representing member states, in a statement.

Media reports last year alleged the US National Security Agency (NSA) had intercepted Rousseff’s communications and infiltrated Brazil’s state-run oil giant Petrobras.

German Chancellor Angela Merkel also had her phone tapped, according to leaked documents from former NSA contractor and whistleblower Edward Snowden.

The snooping scandals damaged US-EU relations and prompted German calls earlier this month to set up an exclusive EU internet zone in a wider effort to block out US-led spying on EU citizens.

Despite promises made by US president Barack Obama that the Americans do not collect signals intelligence on the scale revealed by Snowden’s revelations, the EU has threatened to scrap data exchange agreements with Washington.

American officials also deny reports they spy on foreign companies in order to gain a competitive advantage.

“The NSA will not be used for industrial espionage or as a tool for American businesses. American companies will not be getting commercial information,” Peter Swire, a member of Obama’s NSA review team, told reporters in Brussels in January.

Swire said there is now a much stricter screen on leadership intelligence when it comes to “our allies than what existed previously.”

Meanwhile, Bild am Sonntag over the weekend cited a senior NSA employee that some 320 German high-ranking officials and businessmen are on a NSA watchlist.

"We have had the order not to miss out on any information now that we are no longer able to monitor the Chancellor's communication directly," the paper quoted the NSA employee as saying.