China issued a furious response yesterday to a report in The Times that Chinese agencies were spying on British companies via the internet.

The report on Saturday said that the Director-General of MI5 had sent letters to 300 executives and security chiefs at banks, accounting and legal firms warning them that Chinese state agencies were hacking into their systems and trying to steal confidential information.

A Chinese Foreign Ministry spokesman said yesterday: “The Chinese Government has always opposed any internet crimes, including hacking which is an international problem.”

Qin Gang added: “We express strong dissatisfaction. It is a very irresponsible act.”

China has lodged a formal protest, claiming that the report was slanderous and prejudiced and ignored the political, economic and social progress made by the country. It also alleged that the report was an attempt to put obstacles in the way of improved ties between Britain and China.

Gordon Brown is expected to make an official visit to Beijing in January. There was no indication that the report would result in those plans being delayed.

The Times reported that the letter from Jonathan Evans, the head of MI5, had told recipients how to identify Chinese “Trojans” – e-mails carrying software designed to hack into a computer network and feed back confidential data. People who had seen the letter told The Times that the security forces believed companies doing business in China were under particular threat from hackers. The hackers are thought to include specialists with links to the People’s Liberation Army (PLA).

Computer experts have also accused hackers connected to the Chinese military of carrying out cyber attacks on the Pentagon, the British Parliament and the German Chancellery.

Analysts who monitor the activities of the highly secretive PLA said that the cyber spies were careful to cover their tracks to conceal any links to the Chinese authorities, particularly the military.

Hackers are usually based outside China – in Russia, Central Asia and in Europe – and are not directly tied to the PLA but are manipulated or managed through other agencies.

Andrew Yang, the secretary-general of the Taiwan-based Chinese Council of Advanced Policy Studies and an expert on the PLA, told The Times: “Information warfare in China is mostly conducted by the private sector so it is difficult to identify who is really behind this.”

He described the methods as highly decentralised but employing systems to ensure that any information garnered got back to state security organisations in China. For its part, China has not only denied that it is engaged in any cyber crime but also claimed that its own networks had also been targeted.

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