The chair of the Senate intelligence committee, who has been a loyal defender of the National Security Agency, dramatically broke ranks on Monday, saying she was "totally opposed" to the US spying on allies and demanding a total review of all surveillance programs.

California Democratic senator Dianne Feinstein strongly criticised the NSA's monitoring of the calls of friendly world leaders such as German chancellor Angela Merkel.

Feinstein, who has steadfastly defended the NSA's mass surveillance programs, added that both Barack Obama and members of her committee, which is supposed to received classified briefings, had been kept in the dark about operations to target foreign leaders.

"It is abundantly clear that a total review of all intelligence programs is necessary so that members of the Senate Intelligence Committee are fully informed as to what is actually being carried out by the intelligence community," Feinstein said in a statement to reporters.

"Unlike NSA's collection of phone records under a court order, it is clear to me that certain surveillance activities have been in effect for more than a decade and that the Senate Intelligence Committee was not satisfactorily informed.

"With respect to NSA collection of intelligence on leaders of US allies – including France, Spain, Mexico and Germany – let me state unequivocally: I am totally opposed," she said.

Feinstein also provided the first official confirmation of a German report that indicated Merkel's phone had been monitored for more than a decade. "It is my understanding that President Obama was not aware Chancellor Merkel's communications were being collected since 2002," Feinstein said. "That is a big problem."

The senator's dramatic intervention comes as the White House struggles to contain the diplomatic fallout from a series of revelations about the NSA's spy operations abroad. They include a report in the Guardian, based on documents leaked by NSA whistleblower Edward Snowden, that at least 35 world leaders have been monitored by the agency.

"Unless the United States is engaged in hostilities against a country or there is an emergency need for this type of surveillance, I do not believe the United States should be collecting phone calls or emails of friendly presidents and prime ministers. The president should be required to approve any collection of this sort," Feinstein added.

"The White House has informed me that collection on our allies will not continue, which I support. But as far as I'm concerned, Congress needs to know exactly what our intelligence community is doing. To that end, the committee will initiate a major review into all intelligence collection programs."

Feinstein's statement comes at a crucial time for the NSA. Legislation will be introduced in Congress on Tuesday that would curtail the agency's powers, and there are the first signs that the White House may be starting to distance itself from security chiefs. On Monday, the White House's chief spokesman, Jay Carney, said the administration "acknowledged the tensions" caused by Snowden's disclosures.

"The president clearly feels strongly about making sure we are not just collecting information because we can, but because we should," Carney said. "We recognize there needs to be additional constraints on how we gather and use intelligence."

Obama told ABC News on Monday evening that he would not discuss classified information but accepted that security operations were being reassessed to ensure proper oversight of the NSA's technical abilities.

He said: "The national security operations, generally, have one purpose and that is to make sure the American people are safe and that I'm making good decisions. I'm the final user of all the intelligence that they gather. But they're involved in a whole wide range of issues.

"We give them policy direction. But what we've seen over the last several years is their capacities continue to develop and expand, and that's why I'm initiating now a review to make sure that what they're able to do doesn't necessarily mean what they should be doing."

On Tuesday morning, James Sensenbrenner, the Wisconsin Republican and author of the 2001 Patriot Act, will introduce a bill called the USA Freedom Act that will ban warrantless bulk phone metadata collection and prevent the NSA from querying its foreign communications databases for identifying information on Americans. Patrick Leahy, the Vermont Democrat who chairs the Senate judiciary committee, will introduce the bill's Senate counterpart that same day.

Also on Tuesday, the two most senior intelligence leaders are due to testify before the House intelligence committee. Both are now expected to be grilled on why they appear not to have informed either the White House or congressional oversight committees about the spying activities directed at foreign leaders.

James Clapper, the director of national intelligence who is under fire for misleading Congress on bulk domestic collection, will testify about surveillance reform Tuesday afternoon. He will be accompanied by General Keith Alexander, the director of the NSA, who last week mused to a Pentagon blog that "we ought to come up with a way of stopping" reporters' stories about the NSA's bulk collection programs.

Their performance is likely to be influential towards members of Congress on the fence about bulk domestic collection ahead of a vote on Sensenbrenner's bill. A July predecessor came within seven votes of passage.

Feinstein's shifting position was not the only emerging challenge confronting the NSA late Monday. A new disclosure from the Electronic Frontier Foundation added to the agency's woes by suggesting that it began testing means to gather location data on cellphones inside the US before informing the secret surveillance court that oversees it.

A short document apparently written in 2011 by an NSA lawyer discussed a 2010 "mobility testing effort" involving "cell site locations." The lawyer, whose name was redacted in a document obtained by the group under the Freedom of Information Act, said that the Justice Department was believed to have "orally advised" the so-called Fisa Court that "we had obtained a limited set of test data sampling of cellular mobility data (cell site location information) pursuant to the Court-authorized program" under section 215 of the Patriot Act, which the NSA uses to justify collecting Americans' phone records in bulk.

Alexander recently conceded that the so-called "pilot program" for cellular geolocation collection existed and said it was potentially a "future requirement for the country." It was previously unknown that the pilot program proceeded before the Fisa Court knew of it.

Just a month ago, in her own committee, Feinstein, delivered a full-throated and unequivocal defence of every surveillance activity conducted by the NSA.

"It is my opinion that the surveillance activities conducted under FISA, and other programs operated by the National Security Agency, are lawful, they are effective, and they are conducted under careful oversight within the NSA, by the Department of Justice and the Office of the Director of National Intelligence, and by the FISA Court and the Congress," Feinstein said on September 26.

In August, following disclosures that the NSA had improperly collected data on thousands of Americans, Feinstein accused the Washington Post of misquoting her, saying her committee "has never identified an instance in which the NSA has intentionally abused its authority to conduct surveillance for inappropriate purposes".

Feinstein is bringing her own legislation to enable superficial reforms of the NSA and the secret court system, but stops short of curbing the intelligence community's powers, is being marked up at her committee on Tuesday.

Feinstein's about-face presents the major challenge for the White House, which perceives the California Democrat as a key Senate surrogate on surveillance issues.

Obama has yet to take a position on the Leahy and Sensenbrenner bills. Congressional aides expect a major push by the NSA to defeat the bills, but are unsure how vigorously the White House will oppose them.

Carney's remarks on Monday, prompted by a growing sense of diplomatic backlash against the US over the NSA, provide additional uncertainty. US officials have distanced Obama from the foreign-leader spying in anonymous comments to the Wall Street Journal.