China’s plans for a new mega-embassy in central London have been thrown into doubt amid mounting national security concerns that the proposed site sits directly above critical fibre-optic cables linked to the UK’s financial networks.
The £750m project at Royal Mint Court, the former home of Britain’s coin-maker, located next to the Tower of London, was set to become one of the largest Chinese diplomatic missions in Europe.
But sources in Whitehall say the government is stalling on a final decision, citing fears that the development could expose sensitive data infrastructure running beneath the site.
The embassy plan has been under review for more than two years, with officials from the Foreign Office and the Department for Business and Trade unable to agree on whether to approve it.
A verdict had been expected this autumn, but insiders now believe the decision could be pushed well into 2026 as ministers weigh national security risks against diplomatic fallout.
Security fears under the surface
Telecoms experts have warned that the location could present unique risks because of the underground network of high-capacity fibre-optic cables that serve the nearby City of London – home to many of the world’s largest financial institutions.
Professor Sophia Economides, head of engineering at Northeastern University London, told City AM that while she could not confirm the site was unsafe, the location “raises legimtimate technical concerns”.
“There are fibre-optic cables that go under the site… it’s very easy to tap into those cables, it’s very easy to see what’s happening – and it won’t be detected”, she said.
Economides explained that even encrypted information can be analysed for metadata and traffic patterns.
“If someone is determined to tap into them… because the site belongs to the embassy, it cannot be accessed or monitored by anyone else”, she said.
She added that while many modern networks include intrusion detection systems, “advanced tapping methods may bypass it”, and said she would want “more reassurances” before being confident the risk had been fully addressed.
The Royal Mint Court development would transform the 5.4-acre site into a vast diplomatic compound including offices, cultural buildings, and accommodation for Chinese staff.
But the project has faced delays since it was first unveiled in 2018, amid growing tension in UK–China relations.
Mounting diplomatic tensions
The embassy plan has already drawn protests from local residents, activists and MPs sanctioned by Beijing, including former xonservative leader Iain Duncan Smith, who has urged ministers to block the proposal outright.
Labour ministers have so far taken a cautious line.
Foreign secretary David Lammy said the government would “take all factors into account” and make the decision “on planning grounds”, while insisting national security remained “paramount”.
However, the issue has exposed divisions within government, with some officials warning that an outright rejection could spark retaliation from Beijing at a time when the UK is seeking to stabilise trade and investment ties.
Security agencies, meanwhile, are understood to have raised new concerns about how the embassy’s diplomatic status could complicate oversight of any technology installed at the site.
Under international law, the compound would be legally considered Chinese territory, severely limiting Britain’s ability to inspect it.
Digital vulnerabilities
The security fears hinge on a vast web of data cables running under east London, carrying high-speed connections between the Square Mile, Canary Wharf, and international exchanges.
These cables form part of the infrastructure that enables London’s global financial trading network.
“From a technical perspective, fibre-optic cable tapping is feasible but requires physical access”, professor Economides said. “If someone has that access, interception becomes very easy”.
She noted that while interception would require specialist equipment and precision, “even the knowledge of traffic flow can be revealing – when messages are sent, how much data is moving, who is communicating”.
British officials are understood to be exploring whether additional legal or technical safeguards could mitigate the risks without killing the deal altogether, though several Whitehall sources say that may be “politically impossible”.
A wider rethink on China ties
The debate over the proposed Chinese embassy has exposed a broader recalibration in Britain’s relationship with Beijing , one driven as much by Downing Street as by diplomats.
At the centre of that shift is Jonathan Powell, Keir Starmer’s national security adviser and a figure whose influence stretches well beyond his formal remit.
Powell, Tony Blair’s former chief of staff, has become one of the prime minister’s most trusted foreign-policy strategists, shaping a pragmatic approach that critics say risks soft-pedalling on China.
Those close to the process say Powell has been instrumental in the quiet rapprochement with Beijing that began over the summer.
Some inside government argue his instincts belong to an earlier era of globalisation, when engagement with China was seen as a path to stability.
Others defend his judgment, describing him as one of the few in Whitehall capable of thinking strategically about the long game.
Powell’s hand has been felt in decisions that have unsettled Washington – from the shelving of a public security review into Chinese investment to the caution shown after the collapse of the alleged Beijing spying case last month.
Yet for Starmer, Powell remains an anchor of continuity at a time when Britain’s foreign-policy identity is being rewritten.
The two share a belief in multilateralism and legal process, and allies say Starmer sees Powell as a guarantor of “seriousness” in national security decisions.
Uncertain odds
Royal Mint Court sits less than a mile from the City’s financial district and overlooks the Tower of London – a location both symbolic and strategically sensitive.
The freehold would be transferred to the Chinese state if the embassy were approved, meaning it could not be entered or inspected by UK authorities without permission.
Planning inspectors are believed to have completed their assessment, but sources say departments remain divided.
“You’ve got diplomacy on one side, and data security on the other – and neither camp wants to blink first”, one official said.
For now, the site remains empty, its future uncertain. What was once expected to become a statement of Chinese soft power in the heart of London has instead become a case study in geopolitical caution – and a reminder that, beneath the surface, even the cables underfoot can carry political risk.
