Germany arrested a British man on the suspicion of spying for Russia.
German federal prosecutors said the man, named as David S, worked at the British embassy in Berlin.
He allegedly passed documents to Russian intelligence “at least once” in exchange for an “unknown amount” of money.
He was arrested in Potsdam outside Berlin on Tuesday and his home and workplace have been searched.
The German Foreign Ministry said it is taking the case “very seriously”.
Foreign Minister Heiko Maas told reporters: “Spying on a close ally on German soil is absolutely unacceptable and we are in full solidarity with our British friends.”
The arrest was the result of a joint UK-German investigation, the statement read.
It was intelligence-led and had been going on for some time leading up to the arrest.
MI5 and other UK agencies, as well as British police, had been working with the Germans to learn as much as they could about the alleged activity.
London’s Metropolitan Police confirmed the arrest of a 57-year-old British national in Germany, as well as the involvement of the Met’s Counter Terrorism Command.
German authorities are in charge of the investigation, but officers will continue to work with German counterparts, the police said.
The man appeared before an investigating judge in Karlsruhe on Wednesday, where he was ordered to remain under arrest pending further inquiries.
Prosecutors said he was hired as a local staff member at the embassy.
Local media claimed the documents passed over were to do with counter-terrorism, and that the man is not thought to have diplomatic immunity.