A suspected Chinese spy who worked as a top aide to a far-right German politician in the European Parliament had previously applied to work for Germany's foreign intelligence agency, the BND.
The accused spy, Jian Guo, was turned down by the BND several years ago, according to information obtained by dpa. The man also reportedly applied to work for the BfV domestic security service in the eastern German state of Saxony but was rejected as unreliable.
Jian Guo was dismissed by Maximillian Krah, the far-right Alternative for Germany's (AfD) top lawmaker in the European Parliament, earlier this week following his arrest on suspicion of espionage.
Prosecutors allege that the man passed sensitive information from inside the European Parliament to Chinese intelligence, and also may have relayed information about Chinese political activists living in Europe.
He was arrested by German police on Monday evening and has been held in custody since. He is accused of acting as an agent for a foreign secret service.
In an apparently unrelated case, police in western Germany also arrested three other alleged Chinese spies this week on accusations that they sought to gather sensitive information about German military technology through a front company.
Krah, who is the AfD's lead candidate for the upcoming European Parliament elections in June, has faced pointed questions over his close working relationship with Jian Guo as well as his own views that are sympathetic to Russia.
German prosecutors on Wednesday announced that there is a separate preliminary investigation into Krah related to possible payments from both Russia and China.
The public prosecutor's office in Dresden said the purpose of the probe is to examine whether there is any reason to suspect criminal conduct involving bribery of members of parliament.
Krah has vowed to continue as the AfD's lead candidate for the upcoming election, but he cancelled all campaign appearances through at least May 1 in the wake of his aide's arrest.
An election rally in the Bavarian town of Weidenberg featuring Krah scheduled for Friday, along with a counter-protest called by a local trade union confederation, were called off by the party.
Krah is scheduled to make an appearance in his hometown of Dresden on May 1, but it remains unclear what will happen after that.
The Chinese Foreign Ministry, meanwhile, summoned Germany's ambassador to Beijing to protest the arrest of Jian Guo and the three other alleged Chinese spies this week.
Chinese Foreign Ministry spokesman Wang Wenbin said China denies any involvement and is calling on the German government to refrain from damaging bilateral ties.
The allegations are completely without foundation, he added.
Ambassador Patricia Flor said she used the summons as an opportunity to remind China's government that Germany will protect its democracy and that any investigation will be carried out without political inference.
"We do not tolerate espionage in Germany, regardless of which country it comes from," the ambassador added.