Brazilian President Dilma Rousseff has postponed a state visit to the US in protest at claims an American spy programme targeted her emails and phone calls.
The 65-year-old was due to be honoured with a state dinner next month in an event meant to strengthen ties between the two key allies.
But revelations about the National Security Agency’s (NSA) espionage programmes and President Rousseff’s dissatisfaction with the US response has made it impossible for her to continue with the trip, her office said in a statement.
The statement read: “Given the proximity of the scheduled state visit to Washington and in the absence of a timely investigation … there aren’t conditions for this trip to be made.
“The Brazilian government is confident that when the question is settled in an adequate manner, the state visit can quickly occur.”
It comes after a series of reports on Brazil’s Globo TV gave details about the NSA programmes in Brazil.
US journalist Glenn Greenwald, who is based in Rio de Janeiro and broke the story of the NSA espionage programmes after obtaining leaked documents from former contractor Edward Snowden, has worked with Globo on its reports.
They included revelations that President Rousseff’s communications with aides were intercepted, that the computer network of state-run oil company Petrobras was hacked by the NSA, and that billions of emails and telephone calls in Brazil were intercepted.
But the White House claimed the decision to postpone the state dinner was a joint one.
Spokesman Jay Carney said Mr Obama and Ms Rousseff had agreed that no single issue should overshadow the important relationship between the US and Brazil.
It means that for the first time since taking office, US President Barack Obama will not hold a state dinner this year for a key ally.
Mr Obama has held six state dinners: for India in 2009; Mexico in 2010; China, Germany and South Korea in 2011, and Britain last year.
President Rousseff is facing a re-election fight next year and Brazil has seen nationwide anti-government protests in June.
David Fleischer, a political scientist at the University of Brasilia, said: “The main objective is political and involves her re-election next year.
“By standing up to US cyber-espionage, it’ll help her popularity and increase her standing in the polls.”