"We have concluded that there are no technical grounds for excluding Huawei entirely from the UK’s 5G or other telecommunications networks," Committee Chair Norman Lamb said.
He admitted that "geopolitical or ethical considerations" should be factored in when deciding whether to allow the phone maker to help build the high-speed Internet infrastructure.
"The Government … needs to consider whether the use of Huawei’s technology would jeopardise this country’s ongoing co-operation with our major allies," Lamb said.
Instead of outright banning Huawei from 5G the committee recommended excluding it from the network’s most sensitive elements and continued close scrutiny.
The UK government has until the end of August to complete its Telecoms Supply Chain Review and decide on how to proceed.