"These things lead to an ever-greater mistrust among the public," Bundestag (German parliament) NSA inquiry committee member von Notz said. "That isn't good for the transatlantic relationship in these difficult times. Both the US and Frau Merkel come off badly.
A release from Wikileaks this week showed that the NSA spied on top German officials and cabinet ministers involved in economic, finance and agricultural policy under Merkel and previous chancellors going back to at least the 1990s.
Von Notz added that "Merkel should speak as frankly in public about the scandal as she did on her own phone" in conversations which were reported within the NSA and are now appearing in the media.
The Green MP has been heavily involved in public debate on the importance of NSA spying, with right-wing critics arguing that co-operation by the German Foreign Intelligence Service (BND) in NSA eavesdropping on German companies and European allies did not pose a problem.
"There are legal problems with what the BND has done, there have to be reforms and consequences. This couldn't-care-less attitude doesn't help our country or our intelligence services."
"The USA and Germany and Europe are bound together by common values, including the rule of law. We have to reinstate the integrity of our relationship," von Notz argued.
CIA spied on Spiegel for Chancellery
Meanwhile, Der Spiegel reported on Friday that it had been the target of US spying, with the information about journalists' private conversations passed to the German government.
In 2011, the CIA warned the head of intelligence at the Chancellery, Günter Heiß, that his deputy had given classified information to journalists from the weekly news magazine.
The official, who was later named in internal Chancellery documents, was transferred to a different role, although he suffered no formal disciplinary consequences.
But federal officials went on to conceal the reason for the man's transfer from the parliamentary intelligence oversight committee, Spiegel reported.
Staff at the magazine believe the tip-off could only have come from eavesdropping on their communications, and have filed a case with federal prosecutors.
'Tip of the iceberg'
Christian Flisek, the top SPD MP on the NSA committee, said on Friday that this week's revelations of US spying on the German government were only the tip of the iceberg, after an hours-long meeting on Thursday night.
News of the spying prompted the government to summon the American ambassador for talks with the Chancellor on Thursday, but the scandal has so far not prompted any public comment from Merkel herself.
Finance Minister Wolfgang Schäuble, though, told Bild on Friday that "the impression is forcing itself upon us that someone or other in the American secret services has somewhat lost sight of the norm."
But he added that spying by the Americans was a "small problem", and that "other world powers cause me more worry."
Flisek's counterpart from the Linke (Left) party Martina Renner said that the government has wasted time debating "whether the NSA also conducts espionage in Germany" and had offered only a vague response to repeated spying scandals.
"All the assurances that Germany wasn't being spied on were apparently false," André Hahn, chairman of the Bundestag's intelligence oversight committee, told the Berliner Zeitung on Friday.
"This is about full-on political espionage. This is criminal. That's why the attorney-general should begin investigations immediately and bring those responsible to justice."
"Of course it's being contested publicly, but there are a lot of lies being told," Former Finance Minister Oskar Lafontaine told the Saarbrücker Zeitung on Friday. "This is about economic espionage."