The United Kingdom had been seeking new entrants into the nation's 5G telecommunications market since January, Downing Street announced on Friday.
"We set out in January that we were seeking new entrants into the market in order to diversify, and that is something we have been speaking with our allies about including the United States," a government spokesman said as quoted by Reuters.
British officials will also look into the impacts of Washington's sanctions on Huawei, the spokesperson added.
Huawei vice-president Victor Zhang said in a statement that reports from "unnamed sources" did not make sense, adding that his company was "100 [percent] owned by employees" and operated in the UK for 20 years.
"[Our] priority has been to help mobile and broadband companies keep Britain connected, which in this current health crisis has been more vital than ever. This is our proven track-record,” he said at the time.
— Reuters UK (@ReutersUK) May 29, 2020
The news comes as the FTSE fell 0.8 percent due to fears over Washington's potential response to Beijing after the latter approved a National Security Law aimed at strengthening control over Hong Kong, a major finance hub for UK businesses.
“The market thinks the security law headline is mostly behind, so it will be looking for the actual list of U.S. reactions and whether it will make a change on Hong Kong’s special trade status,” Stephen Innes, markets strategist at AxiCorp said as cited by Reuters.
Hong Kong has governed by a "one country, two systems" decree after returning to Beijing in 1997.
Trump Ban Extended A Further Year As China Moves Away From US Tech
Downing Street's announcement comes after the Trump administration extended a ban on US firms doing business with Huawei, ZTE and over 70 Chinese tech companies placed on an Entity List in May last year.
But the US will grant further licences to US firms for the same companies, it was reported in May.
China's State Council announced this week it would invest $1.4tn to boost mainland tech firms in a bid to move away from foreign technologies and weather Washington's trade war on Beijing.
Washington has routinely accused Chinese firms of being used to spy on behalf of the Chinese government, which both Beijing and Huawei have repeatedly and sharply refuted.
The have not provided any evidence on its claims despite Huawei and Chinese officials urging them to do so.