British Telecom's new communications network has been installed by Chinese telecom giant 'Huawei', which is allegedly funded by Beijing and has links to the People's Liberation Army.
Intelligence Officials said that in case of a war like situation, China could use BT to halt critical services such as power, food and water supplies.
In Jan, the Chairman of the Joint Intelligence Committee, Alex Allan had expressed concern as government departments, the intelligence services and the military were all going to use the new BT network.
Chinese hackers have a history of targeting western networks, and the Chinese Army is reputed to hold an annual competition to recruit the country's best hackers
In 2007, computers at the Foreign Office and other Whitehall departments were attacked by Chinese hackers. Later, the MI5 Director-General Jonathan Evans warned 300 British businesses that they were under Chinese cyber-attack. Two years ago, Chinese Trojan horse spy ware was found in the offices of Angela Merkel, the German Chancellor.