The U.K. government will reportedly allow Huawei to build out parts of its 5G wireless networks, defying U.S. demands for a blanket ban on the Chinese tech giant. Citing unnamed sources, The Daily Telegraph first reported that Britain's National Security Council agreed on Tuesday to let Huawei provide "non-core" technology, like antennas, to the country's mobile operators for the next-generation networks. The U.K. will not allow the Chinese firm to provide "core" technology, which includes software and other equipment that link primary internet connections, several media outlets reported. In a statement to CNBC on Wednesday, a U.K. government spokesperson said, "National Security Council discussions are confidential. Decisions from those meetings are made and announced at the appropriate time through the established processes." "As part of our plans to provide world class digital connectivity, including 5G, we are conducting an evidence based review of the supply chain to ensure a diverse and secure supply base, now and into the future. This is a thorough review into a complex area and will report with its conclusions in due course," the statement continued.

A U.K. decision to allow Huawei to build parts of the country's new networks could set up a clash with key allies like the U.S. and Australia that have outright banned the company's 5G equipment, citing concerns it could provide a backdoor for Chinese espionage. Huawei has repeatedly denied that it would engage in any form of spying or provide data to the Chinese government. Experts have been skeptical about Huawei's assurances that it isn't a security risk, pointing to Chinese laws that allegedly mean every domestic company is legally mandated to assist the country in intelligence gathering if Beijing requests it. Huawei welcomed the media reports in a statement Wednesday saying, "While we await a formal government announcement, we are pleased that the U.K. is continuing to take an evidence-based approach to its work and we will continue to work cooperatively with the government, and the industry." 5G is designed to bring faster speeds and lower lag times than previous wireless networks like 4G and 3G. It has been touted as a game-changer for industries like driverless cars or remote surgery that require quick, reliable internet connections. Huawei is the world's largest provider of telecommunications equipment, followed by and Finland's Nokia and Sweden's Ericsson.