Britain should grant Germany's federal prosecutor access to an RAF base which is alleged to have acted as a relay station for data intercepted from Angela Merkel's mobile phone by the US National Security Agency (NSA), the Labour MP Tom Watson has said.

In a letter to the prime minister Watson said that full British co-operation with Harald Range, the German federal prosecutor who has announced an investigation into the alleged tapping of Merkel's mobile phone, would ensure that Anglo-German relations are not damaged.

Der Spiegel last year revealed that Merkel's phone had been tapped after an investigation based on the NSA files leaked by the US whistleblower Edward Snowden.

Watson said that the German federal prosecutor should be given access to RAF Croughton in Northamptonshire after the Independent reported that information captured by the "stateroom" system of US listening stations in diplomatic missions is sent back to Washington via the base near Milton Keynes.

The Independent reported that documents showed that the base hosts "tech support activity" by the Special Collection Service (SCS). This is the joint CIA / NSA unit which runs around 100 listening posts in parallel with a scheme overseen by GCHQ, the Independent reported.

Watson called on the prime minister to disclose all material held by any public department that is relevant to the German investigation, to give federal prosecutors access to RAF Croughton and to carry out an investigation into the practices and use of technology at the base that may be relevant to the German investigation. He also said that relevant documents should be sent to the Director of Public Prosecutions for England and Wales.

In his letter to the prime minister Watson wrote: "There will be no better moment to announce that Britain acknowledges the seriousness of the German criminal investigation; and we will do everything possible to support the work of the prosecutor. Our role in the investigation may be important, given the key role of RAF Croughton in the Defence Information Systems Network (DISN) backbone of the US global information grid. I'm sure you are well versed in the specific allegations [about] RAF Croughton."

Watson cited a legal opinion by the public law barrister Jemima Stratford QC that the surveillance exposed in the Snowden files would breach human rights laws. The advice, sent to the all-party parliamentary group on drones chaired by Watson, says that the Regulation of Investigatory Powers Act 2000 (Ripa), which has been used as the legal basis for much of GCHQ's work, has failed to keep pace with changes in technology.

Watson sent his letter to the prime minister as Li Keqiang, the Chinese premier, embarked on a three day visit to Britain. The Chinese foreign ministry announced earlier this month that it had "noted" that Germany had opened an investigation into the alleged tapping of Merkel's phone.