Germany will monitor US and UK agents as part of its long discussed counter-espionage '360 degree view' plan, shifting its focus from China, Russia, and Iran, according to local media.

Two unnamed sources confirmed to Sueddeutsche Zeitung newspaper that Merkel's chief of staff, Peter Altmaier, gave a green light for the step after negotiations with interior and foreign ministers.

According to the paper, the '360 degree view' program gives Germany the ability to spy on American and British agents stationed in Germany, while shifting its focus away from previous targets which included Russian, Chinese, and Iranian agents.

The plan to monitor American and British agents was developed in response to the NSA spying revelations. However, the federal government hesitated to implement it, mainly for fear of conflict with the United States, the paper reported.

"Now we need a strong signal," the paper quoted a source familiar with the move as saying.

The scope and depth of the new intelligence measures have not yet been revealed.

One of the issues currently being discussed is whether or not to eavesdrop on the communications of embassies and consulates. No further details were revealed by the government sources.

The move comes as the level of distrust between Germany and the US is at its highest – triggered by US snooping revelations that Chancellor Angela Merkel’s private phone calls had been monitored by US agents.

In early July, Germany’s secret service arrested a German citizen employed by the national Federal Intelligence Service (BND) on suspicion of spying for the US. The BND official allegedly received 25,000 euros for his surveillance services.

Just a week later, Bild am Sonntag, Germany's largest-selling national Sunday paper, reported that US secret services had recruited more than a dozen officials in various German government ministries to work as spies, including the BND and the Ministry of Defense, with some of them working for the CIA for many years.

This revelation resulted in Germany expelling the CIA chief in Berlin as a retaliation step and “in addition to existing issues.”

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Germany also opened up a new investigation into a German defense official who was reportedly in contact with a US State Department officer.