Last month, the Russian opposition politician was flown to Berlin after falling ill on a flight to Serbia and remains in a coma. His team claim he was poisoned with a Novichok nerve agent.
Germany’s chancellor has since said Mr Navalny was a victim of attempted murder and urged the world to look for Russia for answers.
Ms Merkel said: “Someone tried to silence [Mr Navalny] and in the name of the whole German government I condemn that in the strongest terms.”
The Kremlin has dismissed the allegations and called for Germany to provide information and evidence.
The Russian foreign ministry spokesperson, Maria Zakhharova, asked: “Where are the facts? Where are the formulas, at least some kind of information?”f
Now, Ms Merkel is facing pressure to scrap the Nord Stream 2 pipeline development with Russia.
Norbert Roettgen, head of Germany’s parliamentary foreign affairs committee, told Deutchlandfunk radio today: “There must be a European response.
“We must pursue hard politics, we must respond with the only language [Vladimir] Putin understands – that is gas sales.”
The Nord Stream 2 is a new export gas pipeline running from Russia to Europe across the Baltic Sea.
READ MORE: Putin mocks Merkel threat as President unphased by poisoning pressure
An NSC spokesperson said: “We will work with allies and the international community to hold those in Russia accountable, wherever the evidence leads, and restrict funds for their malign activities.”
Prime Minister Boris Johnson has also hit back at Russia and urged Moscow to explain what happened.
He said: “The Russian government must now explain what happened to Mr Navalny – we will work with international partners to ensure justice is done.”
Back in 2018, a Novichok nerve agent was used to poison former Russian spy Sergei Skripal and his daughter in the UK.
Both survived but Dawn Sturgess was exposed to the same nerve agent and later died in hospital.
The UK accused Russia’s military intelligence of carrying out the attack.
The name Novichok applies to a group of advanced nerve agents developed by the Soviet Union in the 1970s and 1980s.
Novichok agents block messages from the nerves to the muscles, causing the collapse of many bodily functions.
They were reportedly designed to be more toxic than other chemical weapons.
Some versions can take effect rapidly from 30 seconds to two minutes.