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Britain scrutinizes Huawei's telecoms infrastructure role

* Parliamentary committee examines Chinese firm's BT deal

* Huawei, BT say relationship managed in accordance with law

By Paul Sandle

LONDON, Oct 11 (Reuters) - Britain's parliamentary intelligence and security watchdog is scrutinizing Chinese telecoms giant Huawei Technologies Co as concerns mount on both sides of the Atlantic over the potential security threat stemming from the firm's access to communication infrastructure.

Huawei is well established in Britain, and it has a partnership with the country's largest telecoms operator, BT Group PLC , to upgrade networks that stretches back to 2005.

The company was also backed by Prime Minister David Cameron last month when Cameron met Huawei founder Ren Zhengfei - who was a technician in the People's Liberation Army some 30 years ago - to welcome a $2 billion investment by the company in Britain. [ID:nL3E8KB4W2,

However, Huawei has faced an uphill battle in the United States, where lawmakers said on Monday that potential Chinese state influence on Huawei, the world's second-largest maker of routers and other telecoms gear, and on rival ZTE Corp, , could pose a security threat. Huawei firmly rejected the suggestion.

Malcolm Rifkind, chairman of the British committee, said the watchdog's interest in Huawei's relationship with BT predated the U.S. report.

"The issue of Huawei goes back two or three years, with both the United States and Australia, and one or two other countries, expressing concern," he said.

"There's been a particular interest in Huawei because it's a major Chinese company, but one which has its origins in individuals who were in the People's Liberation Army, and there's obviously a question mark as to the extent they are truly independent of Chinese government influence."

Huawei, which has not been called to give evidence to the committee, said it had been subject to UK government scrutiny and procedure since it opened its first office in Britain some 11 years ago.

"We have regular contact with the UK government and welcome all discussions and questions," a spokesman said.

BT also said the relationship was managed strictly in accordance with the law.

"BT takes a risk-management approach on the use of components from Huawei and, like the UK government, we see no need to change our position following the U.S. report," a spokesman said.

"BT's network is underpinned by robust security controls and built-in resilience. We always work closely with each of our suppliers - and government where appropriate - to gain assurance through rigorous review that the security of the network is not compromised."

Huawei established an cyber security evaluation centre in Britain two years ago with security-cleared staff to test the company's hardware and software to ensure it can withstand any cyber security threats.

The government said the centre helped ensure the security of Britain's telecom networks.

"The evaluation centre obviously works very closely with UK government security specialists, and that allows us to satisfy ourselves as well that the equipment coming into the UK meets our standards," a government Cabinet Office spokesman said.

Rifkind, however, said the committee would look at why the centre was needed, how it was working, and what conclusions could be drawn from the way it was operating.

He said the committee's report would be issued to the prime minister by the end of the year if not sooner.

(Additional reporting by Mohammed Abbas; Editing by Peter Galloway)

((paul.sandle@thomsonreuters.com)(+44 20 7542 6843)(Reuters Messaging: paul.sandle.thomsonreuters.com@reuters.net))

Keywords: HUAWEI BRITAIN/COMMITTEE