The NSA's bulk collection of phone data is illegal, the US Court of Appeals has ruled, overturning a landmark 2013 ruling.
The interception of phone call data, which began in 2006, is thought to have targeted European companies and world leaders including German chancellor Angela Merkel.
However, the existence of the programme did not become apparent until two years ago, when whistleblower Edward Snowden leaked details to the public.
The US government argued successfully in the first instance that section 215 of the Patriot Act permitted bulk collection of call metadata, which reveals who or what device is making or receiving calls, but not the content of these conversations.
In the new hearing, though, judge Gerard Lynch determined this was not the case and that the actions of the NSA were illegal.
However, he did not rule the behaviour was illegal under the constitution, as claimed by the American Civil Liberties Union.
Consequently it has not ordered the intelligence organisation to stop the practice but urged the US Congress to take action.
Section 215 of the Patriot Act, and the permission for the NSA's bulk phone data collection given by a secret national security court, are valid until 1 June this year, after which time the US government must vote on whether or not to extend it.
According to the BBC, leaders of the House of Representatives, the lower house in US government, would prefer to pass a bill ending the bulk collection of phone records, but statements made by the leader of the upper house, the Senate, have reportedly pointed towards a desire to extend the Patriot Act and bulk phone data collection.
The full text of the Court of Appeals' ruling can be read here.
