Video report by ITV News Political Correspondent Daniel Hewitt
New Huawei products are to be banned from the UK's 5G network infrastructure from December 31 this year, the culture secretary has confirmed in a major policy U-turn.
Oliver Dowden also announced that all Huawei equipment currently being used within UK 5G will have to be completely ripped out by 2027.
“No new kit is to be added from January 2021, and UK 5G networks will be Huawei free by the end of 2027," Mr Dowden said.
Huawei said the decision means "bad news for anyone in the UK with a mobile phone" and "threatens to move Britain into the digital slow lane".
Mr Dowden admitted "this will have real consequences for the connections on which all our constituents rely.”
Updating MPs in the House of Commons, Mr Dowden added the decision had been made after US sanctions imposed in May forced the 5G giant to use untrusted microchips in their products.
A spokesman for Huawei UK said the firm's future in the UK had been "politicised" and claimed the move is "about US trade policy and not security".
By the next election Mr Dowden said an "irreversible path" for the complete removal of Huawei equipment from 5G networks will have been implemented.
Before sanctions, the firm was using US-made microchips which meant Britain's security agencies were "certain" they could vet Huawei's equipment and avert any threat.
Sanctions are forcing Huawei to produce their own chips, most likely from China, and the National Cyber Security Centre (NCSC) - which assesses the threat of tech firms to the UK - advised ministers they could no longer guarantee to nullify the risk.
ITV News Asia Correspondent Debi Edward explains how the news has been received in China
The NCSC said Huawei has zero access to alternatives which the UK has sufficient confidence in.
They found the new restrictions make it "impossible to continue to guarantee the security of Huawei equipment in the future".
The Chinese ambassador to the UK, Liu Xiaoming branded the Government’s announcement on Huawei “wrong”.
He tweeted: “Disappointing and wrong decision by the UK on Huawei.
“It has become questionable whether the UK can provide an open, fair and non-discriminatory business environment for companies from other countries.”
The ban on Huawei will delay the UK's full rollout of 5G by two to three years and the transition to an alternative will cost "up to £2 billion".
Tech expert Matthew Howett has estimated the delay's cost to the economy to be as much as £6.8 billion "in terms of lost benefit".
"It's about attracting new industries and new investment from manufacturers that want to take advantage of the 5G capability - all that gets lost if you slow us down," he said.
Mr Dowden admitted the rollout of 5G will be "transformative for our country", but said it will only be useful "if we have confidence in the security and resilience of the infrastructure it is built upon".
Mr Dowden said the government had always been “clear eyed from the start” that Huawei was “high risk” but added that the US sanctions against Huawei “was a significant material change and one we have to take into consideration”.
Huawei UK vice president Jeremy Thompson said the ban on his firm was "not about trust" but about American "protectionism".
He claimed the sanctions were designed to "protect American interests".
"This is a trade war," he said, "the Americans have under invested in mobile pretty much since the second generation, and here we are on the fifth generation".
He added: "There are two ways of winning a race; you can either run faster - in our business that's you invest in R and D - or trip up the competition.
The Americans have chosen to trip up the competition."
But US President Donald Trump’s national security adviser praised Britain’s decision.
Robert O’Brien, who is in Europe this week, said: “The reported UK action reflects a growing international consensus that Huawei and other untrusted vendors pose a threat to national security, as they remain beholden to the Chinese Communist Party.
“We look forward to working with the UK, as well as our many other partners and allies, to spur innovation, promote vendor diversity in the 5G supply chain, and ensure 5G security free from dangerous manipulations.”
Huawei has operated in the UK for more than 20 years and played an integral role in the rollout of the 2G, 3G and 4G networks.
Huawei equipment will be allowed to remain within the infrastructure for these networks as US sanctions do not affect them and tech used prior was more easy to monitor.
Providers of full fibre broadband will be told transition away from new Huawei equipment and will be allowed to do so in a two year period.
The government's aim of full fibre broadband being available across the UK by 2025 remains in place.
Before US sanctions were imposed, Boris Johnson had opted to not ban Huawei from 5G but limited to no more than 35% in the periphery of the network, describing the firm as a "high risk vendor".
That ban on Huawei from the core of 5G remains in place.
Shadow digital, science and technology minister Chi Onwurah called on the Government to “get a grip, get a plan and secure our critical communications infrastructure, our digital economy and our national security”.
She added: "This is a car crash for our digital economy, but one which could have been visible from outer space."
The China Britain Business Council said Britain "risks falling behind in the global race to introduce and exploit this vital technology".
It added: "We understand that the intelligence agencies’ underlying assessment of Huawei’s involvement in 5G has not changed.
"If this is right, this decision is a response to assertive US trade policy rather than to any real or perceived problem with Huawei products."
The government will seek to legislate at the "earliest opportunity" with a new Telecoms Security Bill to put in place the powers necessary to implement this "tough new telecoms security framework".
It will give the government the national security powers to impose these new controls on high risk vendors and create extensive security duties on network operators to drive up standards.