The White House has warned Downing Street not to allow a Chinese embassy to be built near sensitive London financial hubs, the "Sunday Times" reported, quoted by BNR.
The "super embassy" plan was blocked by the previous government amid warnings from British intelligence about its location and the risk of espionage, but was revived after personal lobbying by Chinese President Xi Jinping.
However, new concerns have been raised about the security of the complex due to its proximity to a sensitive hub of critical communications cables that could be vulnerable to attack. The proposed site is located right between the financial hubs of the City and "Canary Wharf" and close to three other major data centers.
A senior US official told the "Sunday Times" that "the United States is deeply concerned about China potentially giving it access to the sensitive communications of one of its closest allies".
The UK is in talks with the US over how to implement a trade deal signed last month. They have until July 9 to agree a deal to avoid imposing a new 50% import tariff on UK steel producers.
When asked what impact the approval of the "super embassy" would have on the US trade deal, the White House official seemed to issue a veiled threat, saying:
"The United States expects all decisions to be made with our bilateral national security interests in mind and after careful mitigation, as recommended and approved by counterintelligence experts".
Diplomats say the Trump administration would have reservations about sharing intelligence with the UK if the embassy were to open.