The foreign ministry told justice officials in Munich five times that investigations against Saif al-Arab Qaddafi, who studied there, could create diplomatic problems with Libya.
German police had opened 11 investigations into the former dictator's son between 2006 and 2010, over allegations including arms trafficking, violence, driving without a licence and insulting a police officer.
But all the probes were blocked, with police suspecting German intelligence of thwarting their work, the magazine reported.
It said the Munich incidents were discussed in intelligence briefings in the chancellery several times.
Germany drew international criticism for refusing to take part in NATO military action against Quaddafi's forces over the last few months.
This has been somewhat defused by a willingness to send materials and personnel to help the rebuilding effort, and last month's reopening of the German embassy in Tripoli.
Members of Qaddafi's former regime say that Saif al-Arab and three of Qaddafi's grandchildren were killed in a NATO air strike on Tripoli on April 30, but Italian President Silvio Berlusconi has denied this.