* Germany discovers two suspected US spies within a week
* Angry Merkel says spying on allies "a waste of energy"
* Germans especially sensitive over privacy due to history
* White House, Berlin say cooperation must continue
Germany has told the CIA station chief in Berlin to leave the country in a dramatic display of anger from Chancellor Angela Merkel at the behaviour of a close ally after officials unearthed two suspected US spies.
The scandal has chilled relations with Washington to levels not seen since Merkel's predecessor opposed the US invasion of Iraq in 2003. It follows allegations that Merkel herself, who grew up in Stasi-ridden East Germany, was among thousands of Germans whose mobile phones have been bugged by American agents.
"Spying on allies ... is a waste of energy," the chancellor said in her most pointed public remarks yet on the issue. "We have so many problems, we should focus on the important things."
Senior conservative supporters denounced US "stupidity" and some Americans said spying on their friends had backfired. But both sides stressed their need to go on working together.
"In the Cold War maybe there was general mistrust. Today we are living in the 21st century. Today there are completely new threats," Merkel said in Berlin, once a key CIA listening post behind the Iron Curtain during the superpower duel with Moscow and now the reunited capital of Europe's most powerful economy.
Her spokesman said the request for the top US intelligence official in the Berlin embassy to leave was made in response to questions raised in recent months on US intelligence activity in Germany and by prosecutors' investigations.
In guarded comments, a White House spokeswoman declined comment on "reports" of "a purported intelligence matter" but she stressed: "Our security and intelligence relationship with Germany is a very important one and it keeps Germans and Americans safe ... It is essential that cooperation continue."
US government sources said the official - whom neither side named - was Berlin station chief for the CIA, the Central Intelligence Agency. A German source said the man would face possible forcible expulsion if he did not leave voluntarily.
Washington's embassy and Merkel's office sit a few hundred metres apart. They lie east and west of what was the Berlin Wall, for the removal of which many Germans still give great credit to their US ally - deepening today's sense of betrayal.
Interior Minister Thomas de Maiziere said: "The Americans are our closest allies in all security questions.
"We're aware of our shared past. But we do not approve of this way of dealing with each other and today's measure, which was reasonable and appropriate, is a clear indication of that."
On Wednesday (local time), Berlin said it had discovered a suspected US spy in the Defence Ministry. That came just days after a German foreign intelligence worker was arrested on suspicion of being a CIA informant and admitted passing documents to a US contact.
The scale of public outrage at these revelations has put pressure on Merkel to take action against the United States, an ally whose defence of West Germany in the Cold War long assured Americans a warmer welcome there than elsewhere in Europe.
However, there is a limit to what she can do and both sides stressed the need to continue to work closely together. They have done increasingly in recent years, on issues from Iran to Ukraine, as Germany shakes off its postwar reticence in foreign affairs and takes on a role more suited to its economic weight.