The Intelligence and Security Committee (ISC) has published its work on the threat the country poses, saying China has managed to "successfully penetrate every sector of the UK's economy".

But it pointed a lot of fingers at Whitehall, saying resources invested into tackling the threat were "completely inadequate" and the "slow speed leaves a lot to be desired".

The committee, made up by MPs from across parties, said interference from the Chinese government in the UK was "not hard to detect", but departments "may not previously have been looking for it" - and agencies were focused on overt operations rather than interference activity.

"The UK is now playing catch up and the whole of government has its work cut out to understand and counter the threat from China," it said.

"The government told the committee that its response to the threat is 'robust' and 'clear eyed'.

"China experts were rather less complimentary, concluding that the government has no strategy on China, let alone an effective one, and that it was singularly failing to deploy a 'whole-of-government' approach - a damning appraisal indeed."

The committee's report also warned that Chinese state intelligence targets the UK "prolifically and aggressively" and in a way that poses a "challenge" for British intelligence agencies.

The report, published on Thursday, said the UK is of "significant interest to China when it comes to espionage and interference", placing the country "just below China's top priority targets".

In evidence to MPs, MI5 director-general Ken McCallum said the challenge posed by China "absolutely raises huge questions for the future of the western alliance".

"None of us can give a confident long-term answer to exactly how the balance of power plays out globally across the next few decades, but it is clear for all of us that this is, I think, the central intelligence challenge for us across the next decade."

The government has been accused of sitting on the sensitive report after the ISC launched its inquiry in 2019 and sent a draft to the prime minister on 15 May.

Responding today, Mr Sunak today welcomed the committee's report and "proposals for further action".

He said that while they were "rightly challenging", "we are alive to the need to make effective use of the new legislation and powers that we have introduced and to continue adapting our approach and actions to meet the challenge that China presents".

"In concert with our international partners we will continue to engage with China to preserve and create space for open, constructive, predictable and stable relations that reflect China's significance in world affairs and to ensure our interests and those of our allies are best advanced."

Mr Sunak described China as an "epoch-defining challenge to the international order" and added: "Wherever China's actions or intent threaten the national interest, we will continue to take swift action."

The prime minister concluded by saying the government would consider the committee's recommendations and assess whether further action should be taken.

"We will publish a full response in due course and in the usual manner."

Chaired by Conservative MP Sir Julian Lewis, the nine-member committee scrutinises the work of the UK's intelligence agencies including MI5, MI6 and GCHQ.

The ISC's findings come as Mr Sunak comes under pressure from some of his backbenchers for not taking a more hawkish stance on China.

A particular concern has been about the extent of China's influence in UK universities, with the report warning that British academic institutions "provide a rich feeding ground for China to achieve political influence in the UK and economic advantage over the UK".

It added: "In order to control the narrative of debate, China exerts influence over institutions by leveraging fees and funding, over individual UK academics through inducements and intimidation, over Chinese students by monitoring and controlling, and over think thanks through coercion. "

But MPs said the government has shown "very little interest" in warnings from academics about the matter.

The report also flagged concerns about the role China is playing in the civil nuclear energy sector.

Although China General Nuclear last year exited the Sizewell C nuclear power plant project in Suffolk, MPs said there were still serious questions about future projects.