By Jack Stubbs and Alexandra Alper
LONDON/WASHINGTON (Reuters) - The United States is making a final pitch to Britain ahead of a UK decision on whether to upgrade its telecoms network with Huawei equipment, amid threats to cut intelligence-sharing ties, people with knowledge of the matter told Reuters.
Britain is expected to make a final call on how to deploy Huawei equipment in its future 5G networks later this month, weighing U.S.-led allegations that the equipment could be used for Chinese state spying against Britain's relationship with Beijing and industry warnings that banning the firm outright would cost billions of dollars.
Huawei, the world's largest maker of mobile networking equipment, has repeatedly denied the allegations. A company spokesman said UK lawmakers had confirmed Huawei equipment would not be deployed in networks used for intelligence sharing.
"Our 5G equipment does not pose a threat to information security," he said. "We are confident the UK government will take an evidence-based approach when making its decision about Huawei's inclusion in the 5G network."
U.S. Secretary of State Mike Pompeo is expected to press British Foreign Secretary Dominic Raab over Huawei at a meeting in Washington on Thursday, the sources said.
Ahead of the decision, Washington had also planned to send a delegation, including deputy national security adviser Matt Pottinger, to meet with British officials this week, sources said. But the trip was cancelled at the last minute, two of the people said, due to bad weather.
Last month, the United States also passed legislation that included a provision bolstering threats to restrict intelligence-sharing with allies that use Huawei equipment.
Washington is seen to be "cocking the pistol," said a person with knowledge of the British government's position on Huawei. "What's unclear is how, when or indeed if it will actually be fired."
A UK government spokesman said: "The security and resilience of the UK's telecoms networks is of paramount importance. The government continues to consider its position on high-risk vendors and a decision will be made in due course."
The U.S. State Department and National Security Council did not immediately respond to requests for comment.
Britain is a key battleground in the geopolitical tug-of-war over Huawei. Officials decided in principle last year to block the company from critical parts of the 5G network but give it limited access to less sensitive parts. A final decision has yet to be made public.
A provision of the U.S. 2020 defence spending law, signed by President Donald Trump in December, directs intelligence agencies to consider the use of telecoms and cybersecurity infrastructure "provided by adversaries of the United States, particularly China and Russia," when entering intelligence-sharing agreements with foreign countries.
The provision, added by Republican Senator Tom Cotton, was aimed in particular at members of the Five Eyes intelligence-sharing alliance made up of the United States, Britain, Canada, Australia and New Zealand, and was intended as a "a first shot across the bow," said a person familiar with the matter.
An aide to Cotton said the senator's team is working on a new draft bill that could be released this month and would "significantly restrict" intelligence-sharing with countries that use Huawei equipment in their 5G networks, following through on earlier U.S. threats to do so.
"I'm profoundly concerned about the possibility that close allies, including the UK, might permit the Chinese Communist Party effectively to build their highly sensitive 5G infrastructure," Cotton told Reuters.