German leaders have attacked French President Nicolas Sarkozy over a deal to provide Libya with a nuclear reactor for desalinating sea water.
Libya has emerged from its pariah status in recent years
Deputy Foreign Minister Gernot Erler said "politically this business is problematic", adding: "German interests are directly affected".
He told the German business daily Handelsblatt that the French and German governments should discuss the matter.
Germany's Siemens has a 34% stake in a subsidiary of French atomic firm Areva.
President Sarkozy clinched the deal on a visit to Tripoli on Wednesday, during which he held talks with Libyan leader Muammar Gaddafi.
The nuclear energy project is aimed at turning sea water into clean drinking water.
Mr Gaddafi gave up Libya's nuclear weapons programme in 2003, ending decades of international isolation.
Mr Sarkozy's deal was condemned by other German politicians, including Greens leader Reinhard Buetikofer, who called it "highly questionable in security policy terms".
"I would not be surprised if [President Sarkozy] soon got up to say: 'Gaddafi is a flawless democrat'," he told the daily Passauer Neuen Presse.
He accused Mr Sarkozy of "reckless, nationalistic activism".
A senior Social Democrat (SPD) deputy, Ulrich Kelber, said Mr Sarkozy's Libya trip was "all about show and the primitive pursuit of his own interests".
The Gaddafi-Sarkozy meeting was seen as a sign of the normalisation of ties between Libya and the EU following the release of six Bulgarian medics, who had been jailed in Libya for more than eight years, accused of deliberately infecting 438 children with HIV-tainted blood.
The EU and the United States had made it clear to Mr Gaddafi that resolving the medics' situation was key to improving relations.