China has called accusations it hacked the Ministry of Defence “completely fabricated and malicious slanders”.

Sky News revealed on Monday night China is behind a massive data breach involving the MoD.

The government will not name the country involved when a minister makes a statement to parliament today, Sky News understands, but two or three attempts were made to hack MoD employees – including personnel.

A cyber attack on an MoD payroll system was carried out, with names and bank details of current army, Royal Navy and RAF personnel and some veterans exposed.

A spokesman for the Chinese embassy in London denied the country had anything to do with an MoD hack and said it had made “relevant responses” to accusations on the 25 and 27 March.

He accused the UK of politicising cyber security and claimed there was no factual evidence of China hacking the MoD.

The spokesman said: “I will hereby reiterate that the so-called cyber attacks by China against the UK are completely fabricated and malicious slanders.

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“We strongly oppose such accusations. China has always firmly fought all forms of cyber attacks according to law. China does not encourage, support or condone cyber attacks. 

“At the same time, we oppose the politicisation of cyber security issues and the baseless denigration of other countries without factual evidence.

“China has always upheld the principle of non-interference in each other’s internal affairs. China has neither the interest nor the need to meddle in the internal affairs of the UK.

“We urge the relevant parties in the UK to stop spreading false information, stop fabricating so-called China threat narratives, and stop their anti-China political farce.”

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The attack was focused on a contractor system that is not connected to the main MoD computer systems. It has now been taken down and a review launched.

All salaries will be paid this month and the MoD hopes serving personnel will not be concerned about their safety, with staff to be provided with advice and support.

Defence Secretary Grant Shapps is due to make a statement on the issue to the Commons this afternoon and, ahead of that, cabinet minister Mel Stride told Sky News the government takes cyber security “extremely seriously” but it is not yet pinning the blame on Beijing.

Downing Street refused to attribute the attack to a specific state or actor ahead of the statement.

The spokesman added: “In relation to the specific contractor involved in this incident, a security review of that contractor’s operations is under way and appropriate steps will be taken after that.”

Tobias Ellwood, a Conservative MP and former soldier, told Sky News China “was probably looking at the financially vulnerable with a view that they may be coerced in exchange for cash”.

“And if this type of cyber attack is taking place here in the UK we can assume other NATO countries will be targeted too,” he added.

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China is winning the war

Tory MP Sir Iain Duncan Smith, who has been sanctioned by China, told Sky News: “China is behind this.

“And the reluctance, I think, comes from this panic that somehow if we upset China, China will kill the business.

“That’s not going to happen because China is so desperate at the moment for trade. We’ve got to recognise if we don’t stand up for the defence of our freedoms or human rights, the right to speak out, if we wish it then we will be worth nothing in the free world.

“I’m afraid China is winning on this war and we’re not even prepared to accept that it is a war.”

Labour’s shadow chancellor Rachel Reeves said the hack was “deeply concerning” and the government “has got questions to answer”.

Luke de Pulford, executive director of the Inter-Parliamentary Alliance on China, said Beijing has carried out many cyber attacks on Britain but the UK has only retaliated once in the form of sanctioning the companies carrying out the attack rather than the Chinese government.

“So I think you can see that there’s a broader pattern within the UK government, really not to upset China if they can avoid doing it even when we’re on the receiving end of offensive cyber attacks,” he said.

He added that FBI director Christopher Wray “put it pretty starkly” when he said Beijing’s cyber espionage programme is so vast it is bigger than all its major competitors combined.

Not China’s first cyber attack on UK

The MoD has been working at speed over the weekend to understand the scale of the latest hack but it is understood investigations have not so far shown any data has been taken.

However, the hack could raise questions about whether other countries with challenging relationships with China will want to share sensitive intelligence with the UK.

The attack comes less than two months after “state-affiliated actors”, alleged to be working on behalf of China, were blamed by the government for two “malicious” cyber attack campaigns in the UK.

Backbench Tory MPs accused the government of not going far enough, with former immigration minister Robert Jenrick calling the government’s actions “feeble and derisory”. The foreign affairs committee chair Alicia Kearns deemed them “sadly insufficient”.

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