In a statement released by his lawyers, the man - who they did not name - said: "I feel forced to respond to the media accusations that I am a 'Chinese spy'. It is wrong that I should be obliged to make any form of public comment on the misreporting that has taken place.

"However, given what has been reported, it is vital that it is known that I am completely innocent. I have spent my career to date trying to educate others about the challenge and threats presented by the Chinese Communist Party.

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"To do what has been claimed against me in extravagant news reporting would be against everything I stand for."

On Monday afternoon, Commons Speaker Sir Lindsay Hoyle reassured MPs that the House "follows the same vetting procedures as the government" and parliamentary security "is working closely and effectively with other relevant authorities" - and keeping security arrangements under review.

Sir Lindsay said a small number of people were briefed about the arrest "on a strictly confidential basis" - and warned members against prejudicing future prosecutions by discussing the matter in the House.

The researcher, who is in his 20s, is understood to have had links to security minister Tom Tugendhat, foreign affairs committee chairwoman Alicia Kearns and other senior Tory MPs.

Scotland Yard said he was arrested in Edinburgh on 13 March.

The Sunday Times revealed that another man, who is in his 30s, was also arrested in Oxfordshire on the same day.

Sir Lindsay said the pair were bailed until early in October.

Officers from the Metropolitan Police's Counter Terrorism Command, which oversees espionage-related offences, are investigating.

Both men were held on suspicion of offences under section one of the Official Secrets Act 1911, which punishes offences that are said to be "prejudicial to the safety or interests of the state".

They have been bailed until early October.

Their arrests led to Rishi Sunak confronting Chinese premier Li Qiang at the G20 summit in India on Sunday over "unacceptable" interference in democracy.

The incident has also thrown a spotlight on the government's stance towards China and raised questions about whether it should adopt a tougher approach.

The prime minister has sought to adopt a more diplomatic stance towards Beijing than some of the more hawkish members of his cabinet and party, who want China to be officially classified as a threat.

This morning Business Secretary Kemi Badenoch echoed Mr Sunak's approach, saying China should not be considered a "foe" but a "challenge".

Ms Badenoch said the claims of spying were an "extremely serious concern" but we "shouldn't be using language that makes people scared".

Asked whether China should be described as a threat, Ms Badenoch told Sky News: "I would define it as a challenge."

Pressed on whether China should be described as a "friend or a foe", she replied: "We certainly should not be describing China as a foe - but we can describe it as a challenge.

"I don't think we should be careless in terms of how we speak about other countries when these sorts of things happen."

But former Lord Chancellor and Foreign Secretary Philip Hammond told Sky News that in his view, the UK should approach China "with our eyes wide open".

"It's not a surprise to me this morning and I hope it's not a surprise to many people that China is spying on us," he said.

He said "many people" were spying on the UK and that the government needed to be "robust in our response".

But he added: "That doesn't mean we should cut trade and investment ties, that we should simply go into a defensive crouch."

The Chinese embassy in London issued a statement yesterday in which it described the incident as "completely fabricated" and "nothing but a malicious slander".

It also urged Britain's lawmakers to "stop anti-China political manipulation".

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Labour's shadow home secretary, Yvette Cooper, claimed security services warned about the dangers of spying "some time ago".

She pointed to the "damning" report from the security and intelligence committee in July which said the government had "no strategy" to deal with China.

"We think there has to be a comprehensive strategy towards the risks, the challenges, and the threats from other states to our national security," she said.

Asked if she believed China was a friend or foe, she said: "Well, the relationship is clearly complex.

"There are serious issues around the human rights abuses in China. There are serious issues around their approach and their role across the world. And we also have this trading relationship, as we've seen the rise of China. We have to deal with that. But in particular, we have to make sure we protect our own national security. That has to come first."