When the government of Malta - a small clutch of islands in the Mediterranean Sea with a total population of under half a million - decided to establish its new embassy to the European Union, it knew it had to lavish big sums of money on the project.

And that is not just because the former British colony, which got its independence in 1964, wanted to make a statement about its standing among nations, but also because its economy is entirely dependent on foreign trade, and the bulk of it is conducted with the EU.

So a big embassy in Brussels, the EU's capital, was not only a matter of pride, but also of necessity.

And Dar Malta - or "Malta House" - which opened back in 2007, turned out to be splendid: A 13-storey modern building literally opposite the headquarters of the European Commission, the EU's executive body.

The only snag is that, according to a clutch of recent allegations made public in Brussels, Western intelligence services have suspected for more than a decade that Malta's iconic building was being used by China to spy on EU communications. Welcome to the murky world of spying and embassy construction, a venerable pastime with plenty of historical examples.

Malta's government struck a bargain when it first bought the existing building on that site almost two decades ago: It paid nine million Maltese pounds at the time - the equivalent of roughly S$41 million today - for what was a prime location in a prime European capital.

It spent lavishly on redoing the building and on the installation of a "high-security system and a communication link-up" between Valletta, the Maltese capital, and Brussels, as the Times of Malta reported at the time.

And it claimed the entire project would repay itself, for Malta's 50 diplomats working at their EU representation needed only five floors in the building, leaving all other storeys to be rented out to commercial companies.

Still, since the Maltese government predictably came under fire from its parliamentary opposition about the grand scope of the project, it was keen to find potential sponsors who could lower the costs.

And that was when China stepped in with an offer of a "cooperation agreement" signed in 2006, under which Beijing donated furniture and other internal fixtures to the newly built embassy.

The deal did not look odd, since China was interested in Malta for the same reasons the British ruled Malta for centuries: Its islands are strategically located at the intersection of trading routes between Europe, the Middle East and Africa.

But according to a May 15 report in France's Le Monde newspaper, "since the beginning of the 2010s, Belgium's state security has suspected the embassy of harbouring technical means installed by the Chinese security services to spy on European institutions". These activities "could, according to Belgian intelligence, be lasting today".

The Maltese government denies that there is any problem - the building, it says, "has been repeatedly swept for security purposes and found to be in the clear". Besides, the furniture accepted from China was installed "in line with the relevant security procedures", and most of it has already been discarded.

The Chinese embassy in Brussels was equally dismissive. "Espionage claims are false," said a spokesman.

Some reports claim that British security services first alerted the Belgians about the alleged goings-on in the Maltese embassy, while other reports claim that the Belgians themselves grew suspicious.

Still, a spokesman for Belgium's homeland security service, the Veiligheid van de Staat, did confirm that the Maltese embassy was the subject of a previous inquiry, although it also added "that there has never been any evidence (of) Chinese espionage".

And there is a long history of intelligence services using building opportunities to plant listening devices. The Americans used Russian construction workers to build the new US embassy in Moscow during the 1980s; they subsequently discovered a maze of recording devices plastered into the walls.

In denying that its building may have been used for spying activities, the Maltese government obliquely acknowledged similar suspicions.

It pointed out, for instance, that a number of television sets gifted by China for its embassy in Brussels were never plugged in and "ultimately disposed of", presumably because the devices could do more than just play Netflix.