Diplomatic relations between Germany and the US plunged to a new low after Angela Merkel's government asked the top representative of America's secret services in Germany to leave the country.

While not formally amounting to a full expulsion, the move nonetheless sends a dramatic signal: after a year-long dispute triggered by the revelations of NSA whistleblower Edward Snowden, Merkel seems to have finally run out of patience with Washington's failure to explain itself.

According to Süddeutsche Zeitung, the US embassy staffer who has been asked to leave is a CIA "chief of station" who coordinates secret service activity in Germany, and who emerged as the key contact for two German officials recently arrested for allegedly spying for the US.

According to German media reports, such drastic action had previously only been thinkable when dealing with "pariah states like North Korea or Iran".

Clemens Binninger, a member of Merkel's Christian Democrats, who chairs the committee that oversees the intelligence services, said at a press conference in Berlin that the action came in response to America's "failure to cooperate on resolving various allegations, starting with the NSA and up to the latest incidents".

It follows two reported cases of suspected US espionage in Germany and the year-long spat over reported NSA spying in the country, including claims that Merkel's phone was tapped.

A spokesperson for the CIA declined to comment on Germany's request when approached by the Guardian. White House press secretary Josh Earnest also declined to comment, while stating that the US government took intelligence matters "very seriously".

He said: "I don't want you to come away from this exchange thinking we take this matter lightly."

There are few precedents for such dramatic measures between Nato members. Among the latest was France's decision in 1995 to send home several US officials for spying on its territory.

Merkel's spokesman, Steffen Seibert, confirmed the German government's decision in an official statement that said: "The government takes these activities very seriously. It is essential and in the interest of the security of its citizens and its forces abroad for Germany to collaborate closely and trustfully with its western partners, especially the US.

"But mutual trust and openness is necessary. The government is still prepared to do so and expects the same of its closest partners."

The German chancellor herself said: "Viewed with good common sense, spying on friends and allies is a waste of energy. In the cold war it may have been the case that there was mutual mistrust. Today we live in the 21st century."

Allegations that Merkel's mobile phone had been monitored by the American National Security Agency first emerged last October, eventually leading to the creation of a parliamentary board of inquiry in March.

Since then, frustration has grown among German parliamentarians over Washington's failure to answer a list of questions submitted in the wake of the scandal, such as whether Merkel's phonecalls had been monitored from the roof of the American embassy, as reports have indicated.

In April, it was revealed that the US government had denied Merkel access to her NSA file before her visit to Washington.

US-German relations have been further strained by two allegations of American spying on the German government. Last week, a 31-year-old member of the German intelligence agency (BND) was arrested after a member of the German intelligence agency was arrested.

On Wednesday the home and office of an employee of the German defence ministry was searched under suspicion of espionage activity.

The documents provided by the BND mole reportedly included papers on a German parliamentary panel that is investigating the NSA's mass surveillance activities and the extent of German cooperation in the snooping.

The folders, the contents of which were transferred digitally on a USB stick, were thought to contain instructions from Merkel's office to the head of the BND and an overview of the agency's network of overseas posts, Die Welt reported.

German politicians remain at odds over the importance of the documents obtained by the BND employee, but there is little dispute between the parties over the gravity of the allegations, and it is noticeable how some of the most vocal criticism has come from with Merkel's traditionally atlanticist Christian Democratic party.

"If the situation remains what we know now, the information reaped by this suspected espionage is laughable," the interior minister, Thomas de Maizière, said in a statement. "However, the political damage is already disproportionate and serious."

The finance minister, Wolfgang Schäuble, also used strong language. "One can only cry at the sight of so much stupidity. That's why the chancellor is very much 'not amused' in this case."

At Thursday's press conference by the supervisory panel, Burkhard Lischka of the Social Democratic party said: "For over a year we have been asking questions and failed to get a response." As a result, cracks had started to show in Germany's relationship with America.

Andre Hahn, a Left party member on the panel, said the recent string of spying cases had shown that "we wouldn't put anything past Russia and China. But there's blind trust in the US." He added: "This trust has now taken a knock."

Binniger said: "The government has asked the representative of the US intelligence agencies in Germany to leave the country as a reaction to the ongoing failure to help resolve the various allegations, starting with the NSA and up to the latest incidents."

Data retention

In Germany, data retention plans met fierce domestic resistance long before they did so at European level. A data retention law was voted in during Angela Merkel's first term in 2007. At the time, members of the two governing parties – Merkel's Christian Democrats and the Social Democratic party – voted overwhelmingly in favour of the regulation. Yet the new law quickly faced a barrage of constitutional complaints by everyone from private individuals to unions and the political parties in parliamentary opposition at the time, such as the Free Democrats and the Green party.

Digital rights activists, such as Germany's Chaos Computer Club, argued there was no evidence that data retention would be of actual use in the fight against terrorism: in Austria, where the data retention directive was implemented, they said the law was purely used to fight minor crimes such as theft. Others have expressed concerns over telecommunication companies' capacity for safely storing sensitive personal data.

Their complaints were heard: in March 2010, Germany's constitutional court ruled that the government's data retention law in its current form was unconstitutional.