Midland telecoms equipment group Marconi could be poised for Chinese ownership after it was reported to be in talks over a £600 million takeover.
Huawei Technologies already has a business partnership with Marconi and is now said to be engaged with the UK company over a fullscale tie-up.
A spokesman for Marconi yesterday declined to comment on reports, one of which indicated the company could make an announcement about the talks today.
A deal is likely to stoke the debate about the state of the British manufacturing sector, as Marconi, which is cutting some 450 jobs at its base in Coventry, is one of the last major British hi-tech companies operating in the telecomms industry. Huawei was chosen as one of BT's eight suppliers as it continued its rapid growth from its launch in southern China in 1988.
It opened up new markets in May when it signed an agreement with Marconi to sell each others' products.