People walk past the U.S. Embassy in Berlin July 10, 2014. Germany asked the top U.S. intelligence official at the Berlin embassy on Thursday to leave the country, a highly unusual step reflecting the deep anger within Angela Merkel's government at the discovery of two suspected U.S. spies within a week. REUTERS/Thomas Peter

BERLIN (Reuters) - German prosecutors have closed an investigation into suspected mass phone tapping of German citizens by British and U.S. spies after finding no concrete indication of any criminal activity, they said on Thursday.

The decision to drop the case brings to an end the latest chapter in a long-running spy scandal, triggered by revelations by former U.S. National Security Agency (NSA) contractor Edward Snowden which have strained ties between Berlin and Washington.

The allegation in 2013 that the NSA bugged Chancellor Angela Merkel’s mobile phone shocked Germans and prompted her to say that spying among friends was totally unacceptable.

In 2015, further allegations suggested that Germany’s BND foreign intelligence agency had helped the NSA spy on European companies and politicians for years.

Prosecutors in Karlsruhe said although the techniques used in U.S. surveillance were known to German intelligence agencies, there was no evidence of them being used to target Germany so they would no longer pursue the case.

“The prosecutors’ investigations and the investigation by the NSA parliamentary committee have found no tangible evidence that U.S. or British intelligence agencies undertook systematic and mass surveillance of German telecommunications and internet (usage) that is against the law,” said the prosecutors in a statement.

Surveillance is a particularly sensitive subject in Germany due to the activities of the loathed East German Stasi secret police, who snooped extensively on ordinary citizens, and the Nazi-era Gestapo.

German prosecutors had dropped an investigation into the suspected tapping of Merkel’s mobile phone in 2015.