The report complicates claims by Cabinet Office minister David Lidington about Huawei's independence from the Chinese state earlier this week

Huawei is almost entirely answerable to Chinese state spies, according to a former Government security adviser - despite a minister's claim that the tech firm is a 'private company'.

The report, written by Peter Varnish OBE for the Henry Jackson Society, says that Huawei is nearly 99% owned by a trade union, which in Chinese law are ultimately controlled by the Communist Party.

As a result, the think tank concludes that it is 'high to certain that Huawei acts on behalf of China's intelligence organs'.

The report, published in The Sunday Times, complicates claims by Cabinet Office minister David Lidington about Huawei's independence from the Chinese state earlier this week.

'Legally speaking, Huawei is a private firm, not a government-owned company,' he told MPs in answer to a question by Julian Lewis, chair of the defence committee.

The firm is at the centre of a heated debate after details emerged of a National Security Council (NSC) meeting when Theresa May was said to have given the green light for Huawei to help build the UK's 5G communications network.

The row boiled over this week, with a group of Conservative MPs writing to culture minister Jeremy Wright voicing their concerns.

A letter from Bob Seely and five fellow Tories states: 'Having China anywhere near our communications systems poses structural risks about the level of Chinese influence in our society.

'Chinese law demands that Chinese firms work with the Chinese secret services.'

Philip Hammond, who has been in China seeking closer trade ties, said whoever leaked the information must be identified. He is pictured on Friday

Mr Seely was a co-author of the Henry Jackson Society report alongside Mr Varnish and Dr John Hemmings, its director of Asia studies.

It found that Huawei is 98.86% owned by the Huawei Investment and Holding Trade Union Committee, which is ultimately answerable to the All-China Federation of Trade Unions.

This was described by the report as a 'core report of the Chinese party-state apparatus'.

China's ambassador to the UK has urged the Government to act independently and resist external pressure as he defended the tech giant

Writing in the Sunday Telegraph, Beijing's ambassador Liu Xiaoming questioned whether the UK would 'choose independent decision-making or not'.

'Countries of global influence, like the UK, make decisions independently and in accordance with their national interests,' he said.

'When it comes to the establishment of the new 5G network, the UK is in the position to do the same again by resisting pressure, working to avoid interruptions and making the right decision independently based on its national interests and in line with its need for long-term development.'



The manner in which details of the NSC discussion were leaked to the Daily Telegraph has prompted a major inquiry.

Members of the Cabinet were expected to be summoned for interviews as part of the formal inquiry headed by Cabinet Secretary and National Security Adviser Sir Mark Sedwill.

Ministers and aides were reportedly issued questionnaires requiring them to explain where they were in the hours following Tuesday's NSC meeting.

They were also said to have been asked to provide details of all mobile phones in their possession and whether they spoke to the Telegraph, which carried the original report about the Huawei decision.

Much of the attention has focused on five ministers who were said to have voiced objections to the Huawei decision - Home Secretary Sajid Javid, Foreign Secretary Jeremy Hunt, Defence Secretary Gavin Williamson, International Development Secretary Penny Mordaunt and International Trade Secretary Liam Fox.

MPs were quick to link the leak to the manoeuvrings around the Tory leadership, with whoever was responsible hoping to burnish their credentials for being tough on China.

All five, however, have either publicly denied being the guilty party or let it be known through aides that they were not responsible.

Also present at the meeting were David Lidington, the Cabinet Office Minister and Mrs May's de facto deputy, Chancellor Philip Hammond, Business Secretary Greg Clark and Culture Secretary Jeremy Wright.

Much of the anger around the leak from the NSC - where ministers are briefed by the heads of the intelligence agencies, MI5, MI6 and GCHQ - reflects concern among MPs and officials that it could damage intelligence-sharing with key partners such as the US.

Mr Hammond, who has been in China seeking closer trade ties, said whoever leaked the information must be identified.