BERLIN (Reuters) - The German cabinet on Tuesday approved draft legislation for the long-delayed reform of Germany's intelligence service, including tighter control of its surveillance activities that were at the center of several scandals in recent years.

Revelations in 2015 that the Bundesnachrichtendiest (BND) helped the U.S. National Security Agency (NSA) to spy on European allies caused public outrage and embarrassed German Chancellor Angela Merkel.

The reform measures still need to be finalised by parliament, which is expected to debate the package before its summer break begins in July.

The reforms would ban the BND from spying on countries in the European Union and its citizens, as well as EU institutions, except in the case of suspected terrorist activity.

The draft legislation also calls for the creation of an independent body that includes judges from Germany's highest court and chief federal prosecutor's office, to approve strategic foreign espionage activities.

It would also ban the BND from carrying out economic espionage.

In April, Gerhard Schindler, who ran the BND since 2012, abruptly left his post two years earlier than planned amid reports that he was forced out over disagreements about the reform effort.

(Reporting by Thorsten Severin; Writing by Andrea Shalal; Editing by Raissa Kasolowsky)