Chinese telecoms company is developing equipment to be used in millions of British homes.
The new technology is to be rolled out as part of BT's £2.5bn plan for super-fast broadband to reach two-thirds of UK homes and offices by 2015.
But the testing of internet and telecoms equipment in Chinese laboratories 7,000 miles away has raised security fears over the sharing of technology between Britain and China.
Telecoms giant Huawei, which has a turnover of £17bn and employs 110,000 staff around the world, has strong ties to the Chinese military which security experts warn could make Britain vulnerable to cyber attack.
Dr Kim Howells, the former chair of Parliament's Intelligence and Security Committee, described the shared operation between BT and Huawei as 'very worrying'. He said: 'I would urge caution here because I know the intelligence agencies are very wary about sharing technology with the Chinese.
An investigation by The Mail on Sunday has located the testing centre at the headquarters of Huawei in the city of Shenzhen, province of Guandong. Here, Chinese technicians have built exact copies of the computers and telecoms systems used by BT to serve its customers in the UK.
The Mail on Sunday went behind the 10ft steel fences and deep inside the testing centre where signs on the wall of a unit in the research and development section display BT logos on diagrams headed '24 hour mirror test center' and 'Mirror test network center'.
A spokesman for BT said: 'The lab in Shenzhen is simply used for testing purposes and mirrors the environment that BT will use the equipment in the UK. It is not connected to any live UK network and so any such allegation is wrong.' He added: 'The lab is managed strictly to adhere to security rules. It is not connected to BT's live network, BT's test networks or any other UK networks
'No sensitive data from the UK is used in the lab and no live data from the UK can be used in the lab.
years ago we made and tested our own stuff, that was when we all had a brain, but now as we are now brainless we have to give our stuff to a communist country to earn money from.
what a sad little country we have become, owned by china.
China owns the US and we are the US's lapdog.