Jason Lee/Reuters
The Cheltenham-based spooks will scrutinise the technology going into Britain's nuclear facilities amid concerns that Beijing could use a raft of new commercial deals due to be announced this week to threaten the UK's national security.
The news comes as President Xi lands in London tonight on a four-day state visit that Prime Minister David Cameron is describing as the start of a "golden era" in Britain's relationship with Beijing.
Last week The Times reported that security officials had expressed concerns to UK ministers about allowing Chinese companies with links to the military establishment in Beijing to take a stake in three of Britain's nuclear power plants.
China's involvement in the three nuclear power stations, due to be confirmed during President Xi's visit, could see Chinese companies team up with French energy behemoth EDF at Hinkley Point in Somerset and in Sizewell, Suffolk. China could also get the opportunity to design and build its own nuclear facility in Bradwell, Essex.
UK government officials and cybersecurity experts have been concerned for several years that Chinese technology companies like Huawei are building backdoors into their equipment that can be used to spy on other nations. Whitehall, for example, removed the firm's video conferencing equipment from several government departments amid fears that it could be bugged. China has denied these allegations on multiple occasions.
Security sources cited by The Times said that China could take control of Britain's nuclear power plants through these backdoors if diplomatic relationships ever broke down.
It's understood that British intelligence agencies were familiar with the nuclear deal but they haven't voiced their concerns until now.
A GCHQ spokesman said: "GCHQ has a remit to support the cybersecurity of private-sector-owned critical national infrastructure projects, including in the civil nuclear sector and nuclear new builds, when invited to do so by the lead government department involved."
The report in The Times coincides with a report in The Wall Street Journal about state-backed Chinese hackers attacking private American firms.