British Foreign Secretary Jeremy Hunt has urged caution over the role of China's Huawei in the UK, saying the government should think carefully before opening its doors to the technology giant to develop next-generation 5G mobile networks.
His comments come after Prime Minister Theresa May conditionally allowed China's Huawei to build the UK 5G network, according to media reports last week.
The company faces pushback in some Western markets over fears Beijing could spy on communications and gain access to critical infrastructure.
"We are right to have a degree of caution about the role of large Chinese companies because of the degree of control the Chinese state is able to exercise over them in the way that would not be possible if they were large Western companies," Hunt told Monday's Daily Telegraph newspaper.
"That doesn't mean to say that their role is automatically malign, but there are things like the 2017 law which requires all Chinese companies, whatever their ownership, to co-operate with Chinese intelligence services on any occasion.
"Obviously, as we come to our decision, we have to weigh those considerations very carefully."
Huawei is the leading manufacturer of equipment for 5G mobile networks with almost instantaneous data transfer that will become the nervous system of Europe's economy, in strategic sectors like energy, transport, banking and health care.
The United States is adamantly opposed to Huawei's involvement because of the firm's obligation under Chinese law to help its home government gather intelligence or provide other security services when required.
China's ambassador to the UK, Liu Xiaoming, told the Sunday Telegraph that security concerns were "understandable" but he urged the UK to make "the right decision independently based on its national interests".
He said "5G, as a representative of an entirely new generation of communications technology, is not perfect and does still need improvements".
"The risks should be taken seriously but risks must not be allowed to incite fear. They can be managed, provided countries and companies work together," he added.
The Daily Telegraph newspaper broke the news on Tuesday that May approved granting Huawei permission to build up "non-core" elements of Britain's next-generation telecommunications network.
The highly controversial decision was reportedly made at a meeting of Britain's National Security Council.
The final decision will be announced in June, a government spokesman said.