Bild am Sonntag newspaper quoted US intelligence sources as saying that National Security Agency chief Keith Alexander had briefed Obama on the operation against Merkel in 2010.
"Obama did not halt the operation but rather let it continue," the newspaper quoted a high-ranking NSA official as saying.
News weekly Der Spiegel reported that leaked NSA documents showed that Merkel's phone had appeared on a list of spying targets since 2002, and was still under surveillance weeks before Obama visited Berlin in June.
As a sense of betrayal spread in many world capitals allegedly monitored by the NSA, European leaders were calling for a new deal with Washington on intelligence gathering that would maintain an essential alliance while keeping the fight against terrorism on track.
Germany will send its own spy chiefs to Washington soon to demand answers.
Meanwhile, several thousand protesters gathered in Washington on Saturday to push for new US legislation to curb the NSA's activities.
Swiss president Ueli Maurer also warned that the scandal risked "undermining confidence between states".
"We don't know if we're only seeing the tip of the iceberg or if other governments are acting in the same ruthless manner," he told the Schweiz am Sonntag weekly.
As anger simmered in Berlin, Interior Minister Hans-Peter Friedrich sharpened his tone.
"Surveillance is a crime and those responsible must be brought to justice," he told Bild, as Foreign Minister Guido Westerwelle called spying among friends "highly damaging".
Merkel confronted Obama with the snooping allegations in a phone call on Wednesday saying that such spying would be a "breach of trust".
The Frankfurter Allgemeine Sonntagszeitung reported without citing its sources that Obama had told Merkel during their call that he had been unaware of any spying against her, while Spiegel said he assured her that he would have stopped the operation at once.
Merkel's office declined to comment on what Obama told her.
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