UK's parliamentary intelligence and security committee is to investigate the commercial relationship between BT and Chinese ICT firm Huawei.
The investigation was announced by the committee's chairman Sir Malcolm Rifkind amid security fears about Huawei's equipment.
Evidence has been collected for a past number of months from members of the security services and may make its findings public. A report will be sent to David Cameron before Christmas.
The investigation comes amid fears that Huawei's equipment may be not be secure and pose a threat to major broadband and mobile phone infrastructure projects in the UK.
Mr Rifkind said:"In the background are allegations that Huawei has links to the People's Liberation Army in China, and that any Chinese company is ultimately subject to the Chinese government."
BT gave Huawei its first large contract in Western Europe in 2005, supplying equipment to modernise its copper broadband service. Huawei now supplies BT's national rollout of fibre-optic broadband, one of the largest infrastructure projects under way in the UK.
Its equipment has also been used to build the 4G network being launched at the end of this month by EE, the owner of Orange and T-Mobile, and other clients include TalkTalk, Vodafone and BSkyB.
Mr Rifkind continued:"We are looking into the relationship that has developed between Huawei and British Telecom and the implications for the UK.
"We wanted to look at the historical background to that contract, to what extent there were security concerns at the time, whether and to what extend the British government were involved in these decisions, and whether there have been any causes for concern that have arisen since Huawei became involved in our telecoms infrastructure."
A spokesman for Huawei said:"We have been operating in the UK since 2001 under UK scrutiny and procedures. We have regular contact with the government and welcome all discussions and questions."
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