Keir Starmer is facing calls to designate China a threat to national security, after a man thought to be a spy for Beijing was unmasked on Monday.
Several senior Conservative MPs, including former leader Iain Duncan Smith, former security minister Tom Tugendhat and shadow home secretary Chris Philp, led calls for the government to declare China a threat immediately.
Britain's intelligence agencies are also said to be pushing for China to fall under the new designation when it comes into force.
But Starmer is said to be resisting, and has maintained that it is "better to engage, to challenge, than to stay aside" from Beijing.
Naming China a threat to national security would mean that anyone who worked for its government would have to register their activities.
It would come under the Foreign Influence Registration Scheme, which is expected to come into force next year. Russia, North Korea and Iran are all expected to be included.
Foreign Secretary David Lammy said on Monday that China was among the states that pose a "threat" to the UK.
At a press conference in London, Mr Lammy said: "On China, I welcome the court's decision to uphold the Home Office's position on Yang's exclusion.
"And where individuals pose a threat, as you would expect, the UK Government is absolutely committed to using the full range of powers available to disrupt them.
"I raised these issues when I was in Beijing a few weeks ago.
"This case does not exist, sadly, in a vacuum. The UK is in the most complex threat environment that we've seen for a very significant time, including terrorism and states – including China, Iran and Russia – that pose a threat to us.
"Six individuals have been charged under our National Security Act to date. So we recognise the threat, we've raised it with the Chinese government, and we will act wherever we need to."
The alleged spy identified himself on Monday as Prince Andrew's business partner Yang Tengbo. He was banned from Britain by the Government on national security grounds, having visited Buckingham Palace twice during his stint in the UK.
In a statement following his request to lift the anonymity order, Yang insisted he has done "nothing wrong or unlawful".
He added that the "widespread description of me as a 'spy' is entirely untrue". Andrew has attempted to distance himself from Mr Tengbo after the ties emerged.
Andrew will miss the Royal Family’s Christmas party at Sandringham Estate this year, as he has once again found himself in hot water after being linked to an alleged Chinese spy.
The Duke of York has disappeared from public life since stepping down from official duties, but remains at the heart of the royal family's Christmas Day appearance.
Last Christmas, Andrew walked from Sandringham to church with the other royals – symbolic of his gradual rehabilitation within the monarchy.
Both Andrew and Fergie’s daughters Beatrice and Eugenie had already excused themselves, opting instead to spend Christmas with their respective in-laws.
The King and Queen were reportedly holding out hope that the Duchess of York would persuade Andrew to ‘see sense’ and miss the celebrations as the scandal surrounding his connection to the alleged Chinese spy unfolds.
The Duke is still expected to attend a lunch at Buckingham Palace on Thursday, but won’t be attending the Christmas day celebrations with the Royal Family at Sandringham.
Andrew initially stepped down from public life after the furore over his friendship with convicted sex offender Jeffrey Epstein – and a few years later paid millions to settle a civil sexual assault case with Virginia Giuffre, a woman he claimed never to have met.
The major development followed a few days after his disastrous Newsnight interview in 2019 when he said he "did not regret" his friendship with Epstein, who had trafficked Ms Giuffre, and was heavily criticised for failing to show sympathy with the sex offender's victims.
The duke announced at the time he would be "stepping back from public duties for the foreseeable future" and disappeared from a string of high-profile national events involving the monarchy.
Andrew's status as a member of the royal family was left in tatters three years later when the Queen stripped him of his honorary military roles and remaining royal patronage.
The royal family's influence on national life is as much about where and when they are seen as what they say, and the duke has been absent for more than four years from official events.
After attending last year’s Christmas celebrations, it appears his status as a Royal has suffered yet another blow.
