The prime minister is expected to approve plans for a new Chinese ‘super embassy’ in London, Sky News understands, after the government delayed the application numerous times.

Despite the controversy, both the UK’s domestic and foreign security services are said to have given their blessing to the decision, which is expected to be formally announced on 10 December.

The Home Office and Foreign Office will also not raise any formal objections to the plan, as long as “mitigations” are put in place to protect national security, The Times, which first reported the development, said.

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News of the decision comes at a time when the UK’s relationship with Beijing is under major scrutiny after recent allegations of spying in parliament.

A security alert to MPs was issued by MI5 on 19 November, warning of new attempts to spy on them by Chinese security services, and there was outrage at the collapse of the trial of two alleged spies in September – claims the pair deny.

It also comes as Sky News reported that Sir Keir Starmer is preparing for a likely visit to China in the new year, potentially at the end of January.

Here is everything we know about the ‘super embassy’ so far.

Where is it – and when was it proposed?

China bought Royal Mint Court for £255m in 2018. It was built over 200 years ago to produce new British coins, but has remained empty since the last gold sovereign was struck there in 1975.

Previously, it had been earmarked for redevelopment as a leisure complex and was home to the Royal Mint between 1809 and 1967.

A planning application to move China’s current embassy near Regent’s Park to the new site, which sits between the financial districts of the City of London and Canary Wharf, was rejected by Tower Hamlets Council in 2022.

It was resubmitted in July 2024, two weeks after Labour won the general election, with Chinese President Xi Jinping asking Sir Keir to intervene personally.

In August that year, the application was “called in” by then housing secretary Angela Rayner, meaning central government took oversight of it from the local council. Building plans were also submitted.

Ms Rayner announced in August that she was delaying approval of the application over part of the building plans being redacted – something anti-China activists suggest could be a tactic to hide facilities for detaining opponents of the Chinese Communist Party (CCP).

China claims it has “followed the customary diplomatic practices, as well as necessary protocol and procedures” and that the new embassy is being proposed in the spirit of “promoting understanding and friendship”.

New Housing Secretary Steve Reed then extended the deadline once more, announcing on 21 October that ministers needed more time to discuss the matter.

Greyed-out areas with no clear use

There have been large-scale protests against the embassy and outrage when China refused to explain why large parts of the plans were greyed out.

A public inquiry was held in front of the government’s Planning Inspectorate in February and the findings were presented to Ms Rayner to make a final decision.

She demanded an explanation about rooms in the basement of the building that were “greyed out” in the application.

Hong Kongers exiled in the UK over Chinese allegations of national security crimes have expressed fears that such rooms might be used to detain dissidents.

One, Carmen Lau, told Sky’s Henry Vaughan she believes the embassy would become a “hub of transnational repression” and said she is scared of being held there after a Hong Kong pro-democracy protester was forcibly taken inside the Chinese consulate in Manchester in 2022.

In a letter sent to Ms Lau’s neighbours, Hong Kong Police said a HK$1m bounty was on offer to anyone who could provide information or “take her to Chinese embassy”.

In evidence to the Planning Inspectorate inquiry, Simon Cheng, founder of Hongkongers in Britain, said: “China has been accused of operating illegal ‘overseas police stations’ to silence political opponents and even force them back to China.”

He claimed that “approving this embassy risks legitimising and enabling such activities on British soil”.

And during a debate on the plans in parliament, Liberal Democrat MP Ben Maguire claimed the embassy plans could “seriously increase China’s capacity for surveillance, intimidation and transnational repression against Hong Kong activists here in London”.

The Chinese embassy in London responded to Ms Rayner’s letter in August, expressing “serious concern” over the delay in approving its plans and saying foreign countries have an “international obligation” to support the construction of diplomatic premises.

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Beijing officials also claimed that the “internal functional layout for embassy projects is different” from other projects, pointing out that plans for the new US-UK embassy at Nine Elms did not include internal layouts.

DP9, the planning consultancy commissioned by the Chinese government, said it would be “inappropriate” to submit complete floor plans.

Other security concerns

Royal Mint Court used to have a trading floor, which was wired to other financial institutions, and is situated near the City of London’s telephone exchange.

China-critic Conservative MP Sir Iain Duncan Smith has said such infrastructure could easily be used for Chinese espionage.

According to a report in The Sunday Times, the White House has warned the UK government against approving the embassy on similar grounds.

Shadow home secretary Chris Philp echoed America’s concerns in June, telling Sky News: “I agree with the United States. We should not be allowing the Chinese to build the super embassy. It is likely to become a base for their pan-European espionage activities.”

The government previously expressed concerns about another part of the embassy site China proposes to keep open – for the public to visit the ruins of a Cistercian abbey and a Chinese cultural centre.

The Home and Foreign Offices said the area poses a “specific public order and national security risks” because, although members of the public would be allowed in, police and the emergency services would not be due to its “diplomatic inviolability”.

China claimed it would allow first responders onto the site if anyone got into difficulty, as a planning condition, but critics remain sceptical.

Residents of flats located within Royal Mint Court are also against the plans as they have concerns that their new landlords will eventually force them out of their homes.

Other people living nearby fear the security risk of regular anti-China protests at the site, with two taking place earlier this year.

What has China said?

China maintains the new embassy is being built to “promote understanding and friendship” with the UK and “develop mutually beneficial cooperation”.

In September, a Chinese embassy spokesperson told Sky News that claims the new embassy poses a potential security risk to the UK are “completely groundless and malicious slander, and we firmly oppose it”.

They added: “Anti-China forces are using security risks as an excuse to interfere with the British government’s consideration over this planning application. This is a despicable move that is unpopular and will not succeed.”

The Chinese embassy in London said in its August statement that planning applications and all necessary protocol have been followed.

The statement said: “The Chinese side urges the UK side to fulfil its obligation and approve the planning application without delay.

“The planning and design of the new Chinese Embassy project is of high quality, which has been well recognised by various professional bodies.

“The planning application has followed the customary diplomatic practices, as well as necessary protocol and procedures. 

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“In our reply to [the Ministry of Housing, Communities & Local Government], we have provided a comprehensive response to the questions concerning the planning application.

“It is an international obligation of the host country to provide support and facilitation for the construction of diplomatic premises. Both China and the UK plan to build new embassies in each other’s capitals.”

China has so far refused permission for a new UK embassy in Beijing.

Government borrowing was higher than expected and consumers tightened their belts, spending less than anticipated, official figures show.

Government borrowing rose to the third-highest October level since records began in 1993, though less than a year ago, according to the Office for National Statistics (ONS).

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It’s the last assessment of public finances we’ll get before Chancellor Rachel Reeves makes her budget announcement next week. It showed spending on benefits and public services was up, which was offset by higher tax takes.

Expensive borrowing

Billions were spent on borrowing money last month, with interest payments costing central government £8.4bn.

Reacting to the figures, the chancellor’s deputy, James Murray, said, “Currently we spend £1 in every £10 of taxpayer money on the interest of our national debt.

“That money should be going to our schools, hospitals, police and armed forces. That is why we are set to deliver the largest primary deficit reduction in both the G7 and G20 over the next five years – to get borrowing costs down.”

While the numbers won’t have a direct effect on the budget, with figures already submitted, it illustrates the difficult backdrop facing the chancellor, who’s committed to maintaining her self-imposed fiscal rules to bring down government debt and balance the budget by 2030.

It’s unwelcome news for Ms Reeves.

“There was little good news for the chancellor in this morning’s public finances release, with October borrowing in isolation running ahead of the [Office of Budget Responsibility] OBR’s projections by £3.1bn, the second-highest overshoot so far in this fiscal year,” said Pantheon Macroeconomics’ senior UK economist Elliott Jordan-Doak.

“Borrowing has now overshot the fiscal watchdog’s projections in four of the seven months so far this fiscal year”.

As a result of the fiscal bind, tax rises are widely expected to be announced next week.

Public sector net borrowing reached £17.43bn, above the £15bn forecast by economists polled by Reuters.

A slowdown in sales

Retail sales – how much people are spending – shrank 1.1% in the half-term month too. No growth had been expected, rather than a contraction.

This matters as retail sales figures measure household consumption, the largest expenditure in the UK economy.

Consumers were holding back for Black Friday deals, retailers told the ONS.

Along with weakened levels of consumer sentiment, the data paints a picture of worry about the impact of the budget.

The long-running GfK consumer confidence index dropped this month, suggesting the public is waiting for difficult news.

Sir Keir Starmer has insisted the G20 still matters and is a “really important” forum to bang the drum for British business, despite the decision of Donald Trump to boycott the international summit in South Africa.

Asked what he thought of the US president’s decision, the prime minister simply said Mr Trump had “set out his position”.

The PM added he thought it was “really important to be [at the G20] to talk to other partners and allies so we can get on with the discussions around global issues that have to be addressed, and do have an impact back at home, but also to take the opportunity face to face to further the deals that I want to do for our country”.

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Sir Keir has faced heavy criticism at home for the amount of time he has spent overseas and focusing on international affairs. His trip to South Africa to attend the G20 summit is the 45th country the prime minister has visited since taking office.

Speaking to journalists on the flight over to Johannesburg, Sir Keir defended his decision to fly out days before a difficult budget, saying that the international issues being discussed in South Africa have an impact at home, while the G20 nations are important to Britain’s economy.

“The G20 are the 20 strongest economies in the world, they are very important to the UK,” he said.

“In the last three years, the jobs that have been generated in the UK from countries in the G20 is 200,000 and that focus in the budget will be very much the economy and the cost of living. I will focus on the deals we can do, the business we can do with our partner countries and make sure that the work we do internationally is impacting directly at home in the positive sense, that if you want to deal with the cost of living and make people better off, good, secure jobs with investment from G20 partners and allies is really important.”

As part of these efforts, the government will announce £400m worth of export deals with South Africa during the summit.

This summit is the first one in the G20’s 26-year history that a US president has not attended, with one diplomatic source acknowledging this was raising serious concerns. They said: “Trump also made the argument that the G7 should be the G8 [at the last meeting in Canada in June] and now he’s not even going to the G20, so his lack of attendance is, of course an issue.”

Mr Trump has also ordered US officials not to travel to South Africa for the annual meeting, although the country’s president, Cyril Ramaphosa, said on Thursday evening that this might change, with discussions now under way with the US.

While Mr Trump is not attending, Sir Keir will leave the G20 summit early, coming back to the UK on Sunday to prepare for a tax-raising, and possibly manifesto-breaking budget on Wednesday.

The chancellor raised £40bn in taxes in the last budget, insisting that this was a “once in a parliament” tax raid. A year on, Rachel Reeves now has to raise billions more as she looks to fill a black hole as much as £30bn in the public finances, driven in part by a downgrade in productivity, which has lowered growth forecasts, and also her reversal on spending cuts – the winter fuel allowance and disability benefits – that has left her with around £7bn to find.

The government has U-turned on its plan to raise income tax but is expected to extend a freeze on tax thresholds by two years from 2028. The measure will raise about £10bn in additional tax as workers find themselves dragged into higher tax bands and has led to accusations that Labour has broken its manifesto pledge not to raise taxes on working people.

The prime minister, asked whether everyone should expect tax rises in the budget on Wednesday, refused to answer directly. Instead, he said it would be “a Labour budget with Labour values” and based on “fairness”.

He added: “It will have absolutely in mind protecting our public services, particularly the NHS, cutting our debt, and dealing with the cost of living, bearing down on the cost of living. So, they’ll be the principles that will run through the budget.

“Now, of course, the right decisions have to be taken. And we have to see this in the context of 16, 17 years now where we’ve had the crash in ’08, followed by austerity, followed by a not very good Brexit deal, followed by Covid, followed by Ukraine, and that’s why we have to take the decision to get this back on track.

“I’m optimistic about the future, I do think if we get this right, our country has a great future. They’ll be the principles behind the budget.”

While the prime minister is focusing on trade at the G20 summit, Ukraine will also be on the agenda amid reports the Trump administration and Russian officials have drawn up a new peace plan to end the war there.

It would require major concessions from Kyiv, including giving up territory not currently occupied by Russia to Moscow and halving the size of the Ukrainian army. The deal has reportedly been drawn up by Mr Trump’s special envoy Steve Witkoff, who met the current secretary of the national security and defence council of Ukraine and former defence minister, Rustem Umerov, in Miami.

Asked about the plan, Sir Keir said he wanted a “just and lasting peace”, adding: “The future of Ukraine must be determined by Ukraine, and we must never lose sight of that”.

I’m told by one diplomatic source that the Europeans have yet to see this plan, while there are questions as to how advanced in the US administration these proposals are and whether they have the support of Secretary of State Marco Rubio.

European diplomats are stressing that any peace talks have to involve both Ukraine and European input if it is to have any hope of working. Kaja Kallas, the EU’s foreign policy chief, said on the eve of the G20 summit they are yet to see any concessions on the Russian side.

“We welcome all meaningful efforts to end this war, but like we have said before, it has to be just and lasting,” she said. “That also means that the Ukrainians, but also the Europeans, agree to this.”

European leaders are discussing how to best equip Kyiv for another winter of war. Talks are expected to continue this weekend over the plan to use Russia’s frozen assets to generate a €140bn loan for Ukraine.

The plan is currently stalled over Belgium’s concerns of legal risk in releasing funds from the Brussels-based depository Euroclear, where most of the Russian assets are held.

Earlier on Thursday, Sky News revealed Sir Keir is preparing for a likely visit to China in the new year. The trip is likely to be controversial given the UK’s fractious relationship with China, made worse by recent allegations of spying in parliament.

Sir Keir said any visit was not confirmed “yet” and insisted the government would “always robustly protect our interests”.