The Defence Committee Chairman has warned the UK "must not surrender our national security" for "short-term technological development" in the rollout of the 5G telecommunications network.
Tobias Ellwood's comments come as his committee warns that the technology will open the nation up to security risks.
Concerns include the threats of espionage, sabotage and system failures which MPs say would affect individuals, government and defence.
The committee says an increase in the number of mobile devices connected to the internet with the new wireless technology would mean a "greater surface for illicit actions".
In its report on security, it said the Government’s ambitions for the 5G rollout are "laudable", but the vendor market is not sufficiently diverse.
In July, it was announced that Huawei’s equipment will be stripped from the UK’s 5G network by 2027.
This followed tougher US sanctions on the Chinese tech giant, restricting its ability to build chips.
British telecoms companies were told to stop purchasing new 5G equipment from Huawei by the end of the year.
The MPs noted: "Even with the inclusion of Huawei the market was ‘sub-optimal’ and the Government’s decision to remove Huawei completely from 5G by 2027 poses a risk that could potentially result in an even less diverse market, which could bring security and resilience concerns of its own."
They added, however, that there is "no doubt that Huawei’s designation as a high-risk vendor is justified", stating it "poses a significant security risk to individuals and to our Government".
The committee recommends that the west develops its technological capabilities and form a common digital trading platform that would offer a “counterweight” to what China is putting forward.
Mr Ellwood said many smaller vendors have disappeared from the market over the past 10 years: "The only European players you have left is Ericsson and, indeed, Nokia.
"You’ve got Fujitsu and Samsung, as well, that we can probably do more work with.
"Ultimately we need to see this as similar to the space race with the Soviets versus the United States.
"We need that 'Sputnik moment', if you like, when the Americans woke up, poured money into the Apollo programme, and were able to leapfrog ahead to make sure that they didn't become subservient in the technological race of the time.
"The west must urgently unite to advance a counterweight to China’s tech dominance," he added.
"As every aspect of our lives becomes increasingly reliant on access to data movement, we must develop a feasible, practical and cost-effective alternative to the cheap, high-tech solutions which can be preyed upon and which come stooped with conditions which ensnare a state into long-term allegiance to China."
Watch: In July, Culture Secretary Oliver Dowden told the House of Commons that from next year, telecoms firms will be banned from purchasing new 5G equipment from Huawei.
The committee called on the Government to work with its allies in developing a system with which those responsible for international cyber-attacks are held accountable.
It backed the proposal to form a "D10 alliance" of the world’s ten largest democracies to provide alternatives to Chinese technology.
The MPs said there is evidence that the United Kingdom and allies face "many malicious cyberattacks both from rogue individuals and state-sponsored attacks from states such as Russia and China".
"These attacks are diverse in their nature and in their aims," they continued.
"Some attacks aim to steal individual data and state secrets whilst others seek to bring down the network in its entirety."
Mr Ellwood added: "Protecting the public and preserving our nation’s security are amongst the principle responsibilities of Government.
"The decision to embed a technology that compromises this would constitute a gross dereliction of these duties.
"We must not surrender our national security for the sake of short-term technological development.
"This is a false and wholly unnecessary trade-off.
"A new D10 alliance, that unites the world’s ten strongest democracies, would provide a viable alternative foundation to the technological might of authoritarian states, whose true motives are, at times, murky."
A Government spokesman said: "The security of our telecoms networks is of paramount importance and we will not shy away from taking difficult decisions that protect our digital infrastructure while allowing us to seize the revolutionary benefits of 5G technology.
"We are pushing ahead with plans to reduce our dependence on individual suppliers and will shortly legislate to bring in one of the strongest telecoms security regimes in the world."