LONDON (BLOOMBERG) - The UK will keep Huawei Technologies out of "critical national infrastructure," Culture Secretary Nicky Morgan said, as the government weighs on whether the Chinese company can play a role in developing the country's 5G telecommunications networks.

A final decision will come later this month, according to two officials familiar with the matter, who asked not to be named while discussing the sensitive issue.

Ms Morgan's comments to Bloomberg are her strongest signal yet that Huawei will be barred from the most sensitive parts of the UK's 5G telecommunications networks - though the term can also refer to a broader range of assets including power plants and emergency services.

Prime Minister Boris Johnson hinted this week that he is preparing to allow Huawei to supply at least some equipment for the next-generation broadband networks, even in the face of strong pressure for a ban from the US.

"I just want to make it very clear, Huawei will not be involved in our critical national infrastructure," Ms Morgan told Bloomberg Television on Wednesday (Jan 15). "The security, the safety of that infrastructure is absolutely paramount when the government is going to be making that decision."

BALANCING ACT

The UK must balance the demands of its allies, especially the US, who say allowing the Chinese company to be involved in 5G networks presents a security risk, with its domestic priorities of accelerating the roll-out of faster broadband.

"5G is very important - and the roll-out of 5G - in terms of encouraging tech companies to be based here, so there are a number of different factors in making that decision," Ms Morgan said. "Huawei already have a part that they are playing in our 4G and 5G networks."

She also pointed out that the UK depends on relatively few telecommunications suppliers.

"The diversification of the 5G providers, people supplying into the networks, is absolutely a concern and not just of interest to the UK but to countries around the world which are looking to expand their 5G networks," Ms Morgan said earlier on Bloomberg Radio.

NATIONAL SECURITY

Ms Morgan said the UK's National Security Council would discuss the Huawei question, and the government's decision would be a matter of collective responsibility for all ministers. There have been reports that Home Secretary Priti Patel is among those ministers opposed to allowing Huawei any role.

So-called 5G, which stands for fifth-generation wireless technology, promises speeds of as much as 100 times faster than current 4G networks, potentially unlocking new technologies, including automated factories.

Senior US officials visited London on Monday to urge the UK to bar Huawei completely from 5G networks, amid concern that any involvement could open the door to Chinese spies. The US officials warned intelligence sharing in future could be at risk if Britain did not ban the company.

But Ms Morgan's comments are the second strong hint this week that the UK will not bow to US demands, after Mr Johnson told the BBC on Tuesday that "the British public deserve to have access to the best possible technology".

"We want to put in gigabit broadband for everybody," Mr Johnson said. "If people oppose one brand or another, then they have to tell us what's the alternative."

FRIENDS AND ALLIES

Ms Morgan said the government will be conscious of the views its intelligence-sharing partners in the so-called Five Eyes group - comprising the US, Canada, Australia, New Zealand and UK - in making its decision.

One UK official said that the US government's public lobbying for a ban had been counter-productive for the American, because it made it harder for Mr Johnson to change tack without appearing to be bowing to pressure from US President Donald Trump.

Huawei's supporters argue that the company's equipment can be used in non-core areas in a way that keeps the networks secure. But the US warns that the effects of the leap to 5G technology are so poorly understood that the safest and best solution is to keep the Chinese company out altogether. Huawei denies it poses a spying risk.

"We are confident that the UK government will make a decision based upon evidence, as opposed to unsubstantiated allegations," Huawei Vice-President Victor Zhang said in an emailed statement on Tuesday.

Meanwhile, China called on the UK to ignore outside pressure.

"We hope that the UK can make its decision independently," Chinese Foreign Ministry spokesman Geng Shuang told reporters on Wednesday in Beijing, adding that Britain's policy should be "based on its own interests and provide an open, just and non-discriminatory business environment for Chinese companies."