“Data spying scandal threatens EU-US trade talks, headlines the Financial Times, reporting on the latest twist in the story about allegations the US intelligence service, the National Security Agency, routinely gathered phone records and tracked internet use of citizens in a surveillance programme called PRISM. The news emerged following a leak by a former Central Intelligence Agency employee who was named by The Guardian as Edward Snowden, 29.

The economic daily says the scandal could widen existing EU-US splits on data protection policy, part of talks due to begin next month on establishing a trade deal between the US and EU. The plan is already struggling to overcome a French campaign to protect l’exception culturelle, which allows subsidies to be provided for arts industries such as music and film-making.

Ahead of the negotiations, American technology companies and financial services firms have been lobbying for an easing up of restrictions on sharing data between Europe and the US, reports the newspaper.

Brussels presented a draft data protection law last year, which would give EU regulators the power to enforce tough privacy rules. US companies are opposed to many of these measures because they are concerned that their business models would be damaged. The EU privacy legislation has yet to be approved by EU member states and MEPs but the US has long hoped to water down the proposal through the trade negotiations.