The German government is in possession of evidence that Huawei [HWT.UL], the leading maker of telecoms network equipment, has collaborated with Chinese intelligence, the Handelsblatt daily reported on Wednesday.
"At the end of 2019, intelligence was passed to us by the US, according to which Huawei is proven to have been cooperating with China's security authorities," the newspaper quoted a confidential foreign ministry document as saying.
No comment was immediately available from the German government or from Huawei on the Handelsblatt report.
Chancellor Angela Merkel's government and her conservative ruling party are split on whether Huawei's equipment poses a security threat to Europe's largest economy, where the three mobile network operators are all customers of the Chinese firm.
The Foreign Ministry is among the sceptics, with Handelsblatt citing the document as saying that the US evidence amounted to a "smoking gun" that meant Chinese companies could not be trusted to help build new 5G networks.
"Chinese companies cannot be considered trustworthy enough to meet the security standards needed to build 5G networks," the document stated further.
Britain on Tuesday decided to bar Huawei from the sensitive 'core' of mobile networks, exclude it from strategically important sites, and cap its share in the network periphery at 35 percent.
The European Union is due on Wednesday to publish a so-called toolbox that will provide recommendations on how to deal with vendors considered to be high risk, but is expected to stop short of imposing up-front bans on any one network vendor.