The report has warned ministers of the potential risk in involving Huawei (Picture: PA).
Ministers would be "naive" and "irresponsible" to allow Chinese tech giant Huawei access to the UK's telecommunications system, a report has warned.
The defence think-tank Royal United Services Institute (RUSI) says China has a "long history" of cyber attacks, as part of its "ruthless" ambition to boost its interests at the expense of the West.
The report said if Huawei was permitted to participate in the rollout of the new 5G mobile networks, it could install a "hidden backdoor" giving the Chinese government access to the system.
The Chinese embassy has dismissed the claims as "groundless".
The report was written by Charles Parton, a former diplomat with more than 20 years of service in China, Hong Kong and Taiwan.
He said Britain must be prepared to resist Beijing's interference.
"Unlike Moscow, Beijing's interference is not aimed at subverting the West, but represents a rigorous, ruthless advancement of China's interests and values at the expense of those of the West," he wrote in the report.
The report said that as far back as 2013, the parliamentary Intelligence and Security Committee has warned that GCHQ could not be confident of detecting software "insertions" which would enable the secret downloading of information.
"Allowing Huawei's participation (in 5G) is at best naive, at worst irresponsible," the report said.
"The history of China's cyber attacks shows that an integral part of CCP (Chinese Communist Party) interference abroad is getting access to a wide variety of information, whether related to industry, commerce, technology, defence, personal details or politics.
"It is far easier to place a hidden backdoor inside a system than it is to find one."
Speaking to CBS News, Huawei founder Ren Zhengfei denied there are any "backdoors" in its technology to spy for Beijing.
He also dismissed the possibility of there being a way to use the technology without his knowledge.
MI6 chief Alex Younger last year expressed concern about the security implications of Huawei's involvement in 5G.
But earlier this month, it was reported that the National Cyber Security Centre had concluded it could mitigate the risks.
The finding came despite concerns expressed by other members of the "Five Eyes" intelligence partnership - the US, Canada, Australia and New Zealand.
The RUSI report said it could be highly damaging to UK interests if they were to withdraw co-operation as a result of involvement with Huawei.
The report added there was no reason to suppose the UK was not a target for espionage by Chinese intelligence and urged UK security services to make combating their activities a priority.
It also highlighted China's attempts to interfere in academic life in other countries, including the UK, to suppress discussion on issues sensitive to Beijing - such as Tibet or the Tiananmen Square massacre.
However, the report suggests the UK may be less vulnerable than countries such as Australia and New Zealand.