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Britain is preparing to defy Washington and allow Huawei to supply 5G equipment, although the US is expected to mount a last-ditch campaign arguing the Chinese technology still poses a serious security risk.

Downing Street signalled on Thursday that it believed Huawei kit was necessary to ensure that the 5G mobile network was affordable. It is expected, however, to agree fresh restrictions on the company at a ministerial meeting next week.

A Downing Street source said it was not viable for the US to seek to exclude Huawei. “The market conditions are not the same in the US and UK,” the source said. “You could call it a market failure, but we are where we are.”

The implication that there are few alternative providers is not expected to placate the US, which believes that Britain is compromising security over cost. It feels there is a surveillance risk from using technology that one source said “was funded by the Chinese People’s Liberation Army”.

Steven Mnuchin, the US Treasury secretary, is due in London this weekend to give a speech on Saturday and meet his British counterpart, Sajid Javid. He is expected to raise the topic, days before the final decision.

This is due to be made by the National Security Council (NSC), chaired by Boris Johnson, and attended by senior ministers. Security and military chiefs will also be present to give advice.

Industry sources believe that the UK will formally designate Huawei a “high-risk vendor” – having previously been reluctant to do so – and place it under further supply restrictions, such as imposing a cap on its market share. Read more

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