Russia, which hosted the G20 summit in September, is reported to have included bugging devices in the basket of gifts that was given to world leaders.These bugging devices gifted by Russia include USB sticks infected with Trojan horses and recharge cables. The details were first reported by two Italian newspapers La Stampa and Il Corriere della Sera, and picked up by Los Angeles Times.

Suspicion about the drives and recharger was first raised by Herman Van Rompuy, president of the European Council. He sent the devices for technical analysis by experts in Brussels and Bonn. Initial investigation found "the USB sticks and the recharge cables are suitable for undercover detection of computer data and mobile phones," the Italian newspapers said Mr Van Rompuy reported the matter to G20 members in a confidential memo.

Russia, however, rubbished the report, calling it an attempt to distract attention of the recent NSA disclosures of the U.S. spying on its allies.

U.S. President Barack Obama (R) and German Chancellor Angela Merkel arrive for the family picture event during the G20 summit in St.Petersburg, in this September 6, 2013 file photo. President Obama on October 23, 2013 sought to assure German Chancellor Merkel that the United States is not monitoring her communications after Merkel raised the issue during a phonecall with Obama. (REUTERS/Grigory Dukor/Files)

"It is definitely nothing other than an attempt to switch attention from the problems that really exist, which dominate the agenda between the European capitals and Washington, to problems that are ephemeral and nonexistent," Kremlin spokesman, Dmitri Peskov said, according to the Voice of Russia broadcast quoted by LA Times.

Relations between Russia and U.S. have not been too warm since the time Moscow granted asylum to NSA whistle-blower Edward Snowden.

Following revelation, British media has been extensively critical of the alleged Russian attempt with The Telegraph quoting an unnamed diplomat who termed the Russian attempt as a "schoolboy error" which would anyway have been detected.

Report says, further tests are underway on the devices. Any official response to the Russian government's alleged espionage attempts will be based on those findings, the Italian newspapers said quoting an unnamed official.