Prosecutors raided Deutsche Telekom's headquarters as a scandal that has seen Europe's biggest phone company confess to spying on journalists and senior executives escalated, an AFP report said.
Board members meanwhile vowed to sue the company for tracking their calls, a financial newspaper accused it of spying on its staff and the current chief executive looked in danger of becoming implicated in the affair, the AFP report added.
Deutsche Telekom at the weekend conceded that it had hired detectives to track hundreds of thousands of phone calls by senior executives and journalists to identify the sources of press leaks.
Staff representatives on the company's supervisory board said they assumed they were 'the first victims' in the affair and have decided to sue the company for violating their privacy rights, the report said.
'We have decided to take legal action,' said the deputy president of the board, Lothar Schroeder, who represents the Verdi trade union.
Deutsche Telekom admitted on Saturday that it had made 'ill-advised use of communications data' in 2005 and probably 2006.
It has so far admitted only to targeting the magazine Capital but the Financial Times Deutschland alleged that it was also a victim of espionage by Deutsche Telekom and as early as 2000.
The daily said in a front-page report that Deutsche Telekom had hired private detectives to spy on its reporters eight years ago and had even secretly filmed the newsroom.
The telecoms giant insists that the Berlin consultancy firm it hired had not listened to journalists' conversations but only logged details on who phoned whom as well as the time and duration of the calls.
The scandal is proving deeply damaging in a country already nervous about 'Big Brother' style privacy invasion and chief executive Rene Obermann has embarked on a damage control campaign.