Roland Pofalla spent more than five hours talking with the parliamentary committee overseeing the work of the country's security agencies on Monday. Afterwards he told reporters he had written assurances from the US and the UK that they would respect German law.
Initial contact between Germany's secret service, the BND, and the American National Security Agency about a "No Spy Agreement" had already taken place, he said. It would also cover economic espionage.
Pofalla claimed that the willingness of the US government to sign the agreement showed that they had not broken the law.
But chairman of the parliamentary committee and Social Democrat MP Thomas Oppermann said the American offer of the treaty was nothing more than a “face-saving" way to admit that spying had taken place in Germany. He called for the matter to be deal with at the highest political levels rather than by the heads of the secret services.
Social Democrat parliamentary leader Frank-Walter Steinmeier - who did Pofalla's job under Chancellor Gerhard Schröder - was highly critical of the government.
"Instead of switching on a searchlight, the Merkel government has been throwing smoke grenades," he said.
He has been accused of having taken part in the decision back in 2002 to enable the BND to work with the NSA. But he told journalists the agreement he had been involved with was to limit such cooperation rather than expand it.
He also tried to give evidence to the parliamentary committee immediately after Pofalla, but was not allowed in.
Pofalla said the sharing of information between German and American secret services were preventing three to four attacks on troops in Afghanistan each week.
Yet Green Party member of the committee Hans-Christian Ströbele questioned how the data gathered from ordinary Germans in through the NSA programme could be used to stop deadly attacks.
Merkel's government cancelled a Cold War-era agreement earlier this month
with the US and Britain which gave the countries power to request German authorities to launch surveillance operations to protect US and UK troops stationed there.