WASHINGTON/MUNICH, Germany (Financial Times) -- British intelligence has concluded that it is possible to mitigate the risk from using Huawei equipment in 5G networks, in a serious blow to US efforts to persuade allies to ban the Chinese supplier from high-speed telecommunications systems.
The UK National Cyber Security Centre has determined that there are ways to limit the risks from using Huawei in future 5G ultra-fast networks, two people familiar with the conclusion, which has not been made public, told the Financial Times.
The finding comes despite stepped-up US efforts to persuade countries to bar Huawei from their networks on the basis that it could help China conduct espionage or cyber sabotage.
The US National Security Agency has been sharing more information with allies and partners to underscore the risks, but several European countries, including the UK and Germany, have not been convinced that a ban is warranted.
One person familiar with the debate said the British conclusion would "carry great weight" with European leaders, since the UK has access to sensitive US intelligence via its membership of the Five Eyes intelligence sharing network.
"Other nations can make the argument that if the British are confident of mitigation against national security threats then they can also reassure their publics and the US administration that they are acting in a prudent manner in continuing to allow their telecommunications service providers to use Chinese components as long as they take the kinds of precautions recommended by the British," the person said.
The US argues that 5G will be so fast - and have so many military applications - that the risk of using any Chinese telecoms equipment is too high. American officials have also made the case that, although there may be no evidence of nefarious activity so far, Huawei could use malign software updates to facilitate espionage.
Robert Hannigan, former head of GCHQ, the UK signals intelligence agency, recently wrote in the FT that NCSC had "never found evidence of malicious Chinese state cyber activity through Huawei" and that any "assertions that any Chinese technology in any part of a 5G network represents an unacceptable risk are nonsense".
The UK conclusion stands in contrast to Australia and New Zealand - also Five Eyes members - which last year banned telecoms providers from using Huawei equipment in 5G networks.
It also comes as Donald Trump is considering issuing an executive order that would effectively bar US companies from using Huawei. One person familiar with the order said it would be written in a way that was "company and country agnostic".
Speaking at the Munich Security Conference on Saturday, US vice-president Mike Pence said Huawei posed a threat because of a law that requires telecom companies to share data with the Chinese government.
At the same forum, Jens Stoltenberg, Nato secretary-general, told the FT that the alliance was taking concerns over Huawei "very seriously" and that several allies wanted a co-ordinated response.
"We have to look into the level of co-ordination we need to respond. We have not yet concluded as an alliance, but it shows the need to address that issue," he said.
Alex Younger, head of MI6, the UK secret intelligence service, on Friday indicated that Britain might take a softer line on Huawei than the US, saying the issue was too complex to simply ban the company. He said it was "a more complicated issue than in or out" and countries had "a sovereign right to work through the answer to all of this".
The NCSC did not dispute that it had determined that the risk from using Huawei could be contained.
It said it had "a unique oversight and understanding" of the Chinese company and expected Huawei to address engineering and security concerns highlighted in a report last year by the Huawei Cyber Security Evaluation Oversight Board, a monitoring board led by the head of the NCSC.
The next board report is expected to be heavily critical of Huawei's failure to meet earlier demands on equipment, supply chain risks and software engineering.
The NCSC is also contributing to a government review of UK telecoms infrastructure that is being led by the Department of Digital, Culture, Media & Sport (DCMS). The DCMS report will probably contain recommendations on how to handle any threats of Chinese espionage posed by Huawei to 5G networks, according to one person briefed on an early draft.
The UK will probably recommend a diversity of suppliers and partial restrictions of areas of the 5G network, the person added. Mr Younger said it was "not inherently desirable that a piece of significant national critical infrastructure is provided by a monopoly supplier".
A spokesperson for DCMS said the government 5G review was "ongoing" and would be concluded in the spring after examining a range of options. "No decisions have been taken and any suggestion to the contrary is inaccurate," the spokesperson added.
Other European intelligence officials are also concerned about giving Huawei access to 5G networks. But while nations like France and Germany advise caution, they are unlikely to call for an outright ban.
Eric Xu, one of three rotating Huawei chairmen, this month criticised the US campaign to pressure countries to ban Huawei equipment, and questioned whether the US had ulterior motives. "Some say that because these countries are using Huawei gear, it makes it harder for US agencies to obtain these countries' data," he said.