Merkel tells German spies to stop watching reporters

BERLIN, May 15 (Reuters) Chancellor Angela Merkel's government admitted today that the foreign intelligence agency had spied on German journalists and said it had ordered it to stop.

Government spokesman Ulrich Wilhelm said the surveillance by the Bundesnachrichtendienst (BND) appeared to be ''isolated past cases'' and in future ''such operative measures against journalists ... are not to be repeated''.

He said the BND had been asked for a report on the issue this week and the government would then consider what ''personnel consequences'' should be drawn, an indication that heads could roll.

The affair has dealt a new and damaging blow to the BND, responsible for gathering intelligence abroad.

It is already under investigation by a parliamentary committee over the role of two German agents in Baghdad who shared intelligence with Washington at the start of the 2003 Iraq war, which the Berlin government had publicly condemned.

Some members of parliament are now threatening to widen the probe to include BND surveillance of German reporters.

Media reports said some of the country's best known investigative journalists were targeted as the BND tried to find out what they were working on and who their sources were. The reports said the spying had gone on until a few months ago.

The reports said one journalist received 653,000 marks (334,000 euros) for delivering 856 reports to the BND on his colleagues.

Liberal opposition member of parliament abine leutheusser-Schnarrenberger said the affair smacked of ''Stasi methods'', a reference to communist East Germany's secret police.

The BND, whose new boss pledged at its 50th anniversary celebrations last week to make it more ''transparent'', has acknowledged observing journalists in the past in order to identify the source of leaks from within its own ranks.

Interior Minister Wolfgang Schaeuble told reporters: ''It's a question of weighing fundamental rights against each other -- the right to press freedom and the basic right of the BND to protect itself.'' Whether the BND had overstepped the mark would be the subject of further investigation. ''That will all be cleared up,'' he said.

REUTERS SHB BST1857