China’s ambassador to the UK has warned that excluding Huawei from Britain’s 5G network “sends a very bad signal”.

Speaking to BBC’s Newsnight, Liu Xiaoming said Chinese businesses planning to invest in Britain may be put off dealing with the UK if Huawei’s equipment is not used for the network.

It comes after Britain’s mobile operators urged the government for clarity on the issue.

The US is already boycotting the company, due to concerns over security.

It put the company on an Entity List, which is a list of foreign parties that the US Department of Commerce has judged to pose a potential national security or foreign policy threat.

Mr Liu defended Huawei when speaking to Newsnight’s Mark Urban, calling it a “good company”.

He said it contributes “tremendously” to the British economy – employing 7,000 people.

“If [the] UK collaborates with Huawei there would be a promising future on both sides.” said Mr Liu.

But he believes that not giving the tech company the role it seeks would “send a bad signal, not only on trade but on investment”.

He added: “Chinese investment is booming in this country. Even last year it increased by 14%, but if you shut the door for Huawei – it sends very bad and negative message to other Chinese businesses.”

The warning comes after Britain’s mobile operators wrote a draft letter to Cabinet Secretary Mark Sedwill, urging the government to clarify its position.

It said they can’t invest in infrastructure while uncertainty over the use of Chinese technology persists.

On Wednesday it was reported that Huawei ditched a product launch for the first time since the US placed it on a trade blacklist.

It had intended to unveil a new laptop as early as this week, but its consumer device chief Richard Yu told CNBC that it had become “unable to supply the PC”.