German Chancellor Angela Merkel defended government monitoring of Internet communications on Monday, saying a day before President Barack Obama visits Berlin that Washington's cyber-snooping had helped prevent attacks on German soil.

In an interview with broadcaster RTL, Merkel said she would ask Obama for details on the covert US surveillance programme, code named PRISM, that has outraged Germans, with one politician likening US tactics to those of the East German Stasi.

But she also made clear that such methods were necessary to combat terrorism, pointing out that US intelligence had helped lead to the arrest in 2007 of the so-called "Sauerland" cell. Members of the group were later convicted of plotting major attacks on US targets in Germany.

"I think of the Sauerland assassins. We would not have found them without tip-offs from American sources," Merkel said.

"We are quite dependent on that relationship and we also need to ensure we can act ourselves and that we aren't at the mercy of terrorists," she added.

Her comments came after a weekend report in Der Spiegel magazine that Germany's foreign intelligence agency (BND) plans to spend 100 million euros to expand Internet monitoring.

When asked about the report, deputy government spokesman Georg Streiter told reporters on Monday that there were plans in place to build up the BND's capabilities to defend against attacks on IT infrastructure, or so-called cyber attacks.

But he said this had nothing to do with the US surveillance programme, which leaked in newspapers earlier this month and has threatened to tarnish Obama's first visit to Berlin as president.

Germans are highly sensitive to all forms of government monitoring, having lived through the Stasi secret police in communist East Germany as well as the Gestapo under the Nazis.

Obama is due to hold talks with Merkel on Wednesday before giving a speech at the Brandenburg Gate. The visit comes roughly 50 years after John F. Kennedy gave his famous "Ich bin ein Berliner" address at the height of the Cold War.