Chinese technology company Huawei can secretly access phone networks, American officials say.
A Wall Street Journal report claims Huawei maintains back door access to telecom networks around the world through channels designed for law enforcement.
Huawei denies the allegations.
American president Donald Trump signed an executive order in May last year against Huawei prohibiting American companies from licensing technology to the Chinese company. However the reasons for that have been shrouded in secrecy.
But now United States security officials are saying Huawei has maintained back door access into some of the networks it builds, starting as early as 2009 with 4G equipment.
"We have evidence that Huawei has the capability secretly to access sensitive and personal information in systems it maintains and sells around the world," national security adviser Robert O'Brien told the Wall Street Journal.
It's not clear whether the capability has been used, but those buying Huawei's equipment are unaware of the company's level of access, American officials told the Journal.
However Huawei USA security chief Andy Purdy rejected the allegations.
"We vigorously deny the allegation that we retain any such capability," Purdy told The Verge. "We also deny that we have ever improperly accessed customer information or customer data."
It comes after the UK National Security Council last month gave the go-ahead to Huawei but limited the company to a market share of 35 per cent in 5G infrastructure and will exclude its kit from the sensitive "core" of the networks.
Huawei's equipment is cheap compared with tech rivals and security chiefs said any risks could be controlled as non-core gear does not involve processing or storing of sensitive data.
British Prime Minister Boris Johnson had been under intense pressure from Washington to ban Huawei from the entire network as the United States claims the company poses a security risk and threatens UK-US intelligence sharing.
But Johnson stood his ground, and was said to have one eye on expanding trade with China in the post-Brexit era.