Germany is being rocked by a major scandal at Deutsche Telekom.

Staff at the telecoms giant, a third of which is owned by the German government, are accused of tracking calls between the company's top execs and journalists.

Rene Obermann, the group's chief executive, has confirmed a report in the German magazine, Der Spiegel, that hundreds of thousands of calls on fixed lines and mobile phones had been monitored between 2005 and 2006.

The systematic spying ops, which were codenamed Clipper and Rheingold, targeted senior management and members of the supervisory board.

The data was sent to a specialist data company in Berlin, which then filtered records to track down sensitive leaks to the press.

Telephones were not, apparently, bugged but data including telephone numbers and length of each call recorded.

"There are going to be harsh consequences. This is a breach of our data privacy laws", said Obermann.

He added that the billing records of Deutsche Telekom's fixed-line and mobile customers "remain secure".