Senior military and intelligence figures have warned ministers that plans to give China a big stake in Britain’s nuclear power industry pose a threat to national security, The Times has learnt.
George Osborne, the chancellor, hopes to mark President Xi Jinping’s visit to Britain next week by finalising multibillion-pound deals for Chinese state-owned companies to help to build two nuclear power plants. If agreed, China could then design and build a reactor using its own technology at Bradwell on the Essex coast.
Giving China such influence within national infrastructure is causing alarm in security circles. Senior figures have accused the government of rushing into a nuclear partnership with Beijing without proper consideration of potential threats.
“There is a big division between the money men and the security side,” a security source said. “The Treasury is in the lead and it isn’t listening to anyone — they see China as an opportunity, but we see the threat.”
The nuclear deals have been discussed at National Security Council level but the treatment of the issues was described as superficial.
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A well-placed defence source said that senior military officers were very concerned by the prospect of China building a nuclear power station in Britain. There are fears that “trapdoors or backdoors” could be inserted into computer systems, which might allow the Chinese to bypass British control of a nuclear plant in the event of a diplomatic row and shut it down.
One of the companies involved in the nuclear projects, China National Nuclear Corporation, is under central government control and helped to develop the country’s nuclear weapons.
Britain’s intelligence agencies still see China as a threat, especially in the area of cyberespionage. MI5, which has been consulted over the projects, says publicly that “the intelligence services of China . . . continue to work against UK interests at home and abroad”.
The plants that China would help to build are at Hinkley Point in Somerset and Sizewell in Suffolk. The nuclear projects are the biggest elements in what Mr Osborne calls the “golden relationship”, which forecasters say will bring £100 billion of Chinese investment into Britain over the next decade.
The United States has publicly aired its worries over Britain’s increasing ties with China. When the UK became the first western country to apply to join the Chinese-backed Asian Infrastructure Investment Bank, the US National Security Council questioned whether the body met international standards.
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The government adviser Paul Dorfman, of University College London’s Energy Institute, said of the power stations: “No one else in Europe would cut this deal. America wouldn’t dream of letting China have such a part in its critical national infrastructure. The idea the UK is prepared to do so is, frankly, astounding.”
Jeffrey Henderson, professor of international development at Bristol University, said: “There is no other major developed economy on the planet where I can imagine this being allowed to happen.”
Some experts played down the security fears. Raffaello Pantucci, of the Royal United Services Institute, said: “China is a huge economic force; Britain needs the inward investment. This is happening whether we like it or not and the key question is how we engage with it.”
The Department of Energy and Climate Change said: “The UK has robust regulations for the nuclear industry . . . our independent regulator is satisfied that the reactor for Hinkley is safe and secure.”
Although Mr Osborne has thrown his full weight behind the deal and has offered £2 billion in loan guarantees, a final agreement between the French company EDF and China is not assured. Sources close to the discussions said that talks between China, France and Britain were continuing. China is concerned by the high cost and is pushing for a smaller stake than the 40 per cent that EDF wants it to take.
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Lord Mandelson, the former business secretary and European trade commissioner, has become the president of Great Britain China Centre, a quango aimed at boosting links between the two countries.