Oversight of Chinese telecoms giant Huawei will be increased amid fears its equipment could be used for cyber espionage.
The move follows a warning earlier this year by the parliamentary Intelligence and Security Committee (ISC), that the involvement of Huawei, the world's second biggest telecoms gear maker, in the UK's critical national infrastructure risked compromising national security.
Following an internal review GCHQ will be given a greater role in the Huawei Cyber Security Evaluation Centre (HCSEC) – known as ‘the Cell’ – set up in 2010 to test the security of its software and hardware to ensure it does not expose Britain's network to outside hacking or spying.
The review by National Security Adviser, Sir Kim Darroch, concluded that GCHQ should in future "lead and direct" all senior appointments to the Cell. A senior member of GCHQ will also chair a new oversight board monitoring the Cell's work, ensuring its continued independence from the firm which was founded by a former officer in the People's Liberation Army.
The Cell's staff will continue to be employed by Huawei, despite the apparent conflict of interest, as Sir Kim said that, in practice, it was the best way of ensuring complete access to Huawei's products, codes and engineers as the use of non-Huawei staff would be complicated by the firm's non-disclosure agreements with hundreds of third party supplies.
Overall, he said that his review had found the Cell was operating effectively and that the existing arrangements – while in some cases informal – did give it sufficient independence.
"It noted that, after some initial teething problems, Huawei's cooperation with HCSEC appeared exemplary, with equipment and software supplied without delay and full access provided to Huawei design teams," he said.
"It also noted that those vulnerabilities identified since HCSEC's establishment could be explained as genuine design weaknesses or errors in coding practice."
The review's findings were welcomed by Huawei, which said it supported the recommendations to "optimise" the management of the Cell.
"We are pleased that the model of the UK government, the telecom operators and Huawei working together in an open and transparent way has been recognised as the best approach for providing reassurance on the security of products and solutions deployed in the UK," it said in a statement.
"Huawei shares the same goal as the UK government and our customers in raising the standards of cyber security in the UK and ensuring that network technology benefits consumers."
Despite the concerns raised by the ISC, the government has been at pains to avoid antagonising China over the issue at a time when ministers are trying to boost trade links with Beijing.
During his visit to China earlier this month, Prime Minister David Cameron broached the idea of establishing formal process of dialogue on cyber security with Chinese counterpart Li Keqiang.