CHINA has denied US allegations it ''hijacked'' highly sensitive internet traffic - including emails sent to and from US military websites - earlier this year.

A state-owned telecoms company in China had access to 15 per cent of global internet traffic, including confidential emails from NASA and the US Army, for 18 minutes in April, according to an annual security report delivered to the US Congress on Wednesday.

The report warned that the capture ''could enable severe malicious activities'' by China. The state-owned company accused of ''hijacking'' the encrypted information, China Telecom, yesterday denied ''any hijack of internet traffic".

Online security experts say the capture represents ''one of the biggest hijacks'' of sensitive information in the history of the internet.

Relations between China and the US - No. 1 and No. 2 in the world, respectively, in terms of internet users - have long been fraught when it comes to the web.