A government security review of the Huawei Cyber Security Evaluation Centre (HCSEC) has recommended that the centre be supervised directly by members of the UK's Government Communications Headquarters (GCHQ).
The Chinese telecommunications giant opened its security centre in Oxfordshire in 2010, with the goal of independently examining the company's equipment to make sure that Huawei infrastructure was not being used as a "listening post" by Chinese intelligence services.
The report noted that "Huawei's cooperation with HCSEC appeared exemplary, with equipment and software supplied without delay and full access provided to Huawei design teams."
However, concerns were raised with the independence of the centre, considering that all of its staff are employees of the Chinese company.
While this is, according to the government, "the best way of ensuring continued complete access to Huawei products, codes and engineers," the report raises the question of whether it could also introduce a significant conflict of interest.
The report recommended that "in future, GCHQ should lead and direct senior HCSEC appointments (in consultation with Huawei), in particular through chairing the selection panel."
Back in June, the government's Intelligence and Security Committee (ISC) released a report on foreign involvement in the critical national infrastructure, and the implications for national security, in which it identified "a conflict between the commercial imperative and national security, as a result of increasing private ownership of CNI assets combined with the globalisation of the telecommunications marketplace."
The report spurred a critical re-evaluation of Huawei's practices in the UK.
The latest report had a narrower remit, and was mainly focused on the operational independence of HCSEC, including the employment of its staff, its planning and budgetary oversight, how it does its work, and the security around the facility. The review involved "visits to HCSEC, interviews with the main stakeholders, and examination of the documentary evidence."
Prime Minister David Cameron released a statement saying that "oversight of HCSEC should be enhanced," and that "GCHQ should take a leading and directing role in its future senior appointments."
In October 2012, the UK's cabinet office deemed Huawei no threat to UK national security, although it is still subject to restrictions.
"The global reality is that virtually every telecommunications network worldwide incorporates foreign technology," the new report concedes. "Huawei equipment, for example, is now used in 140 countries."
The report was careful to state that "Huawei is a valued investor and employer in the UK."
Huawei has issued the following statement: "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."
The company went on to say: "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."