By Andrew Osborn and Peter Griffiths
LONDON (Reuters) - Britain will clear Chinese telecoms equipment firm Huawei to run a UK-based cyber security center if it agrees to tighter rules to allay spying and hacking fears, a person familiar with the matter said on Wednesday.
Huawei supplies software and equipment which channels phone calls and data around Britain and has found itself at the center of a debate, particularly in the United States, over whether it is a risk for governments to allow foreign suppliers access to their networks.
Last year, the U.S. House Intelligence Committee urged U.S. telecoms companies not to do business with Huawei because it said potential Chinese state influence on the firm posed a security threat.
Australia's government upheld a ban in October on Huawei bidding for work on its National Broadband Network, citing security agency advice.
Huawei, which denies any wrongdoing and maintains its work is secure, opened a technology center in Oxfordshire, southern England, in 2010 to test the security of its software and hardware to ensure that they won't expose the UK network to outside hacking or spying.
The British government ordered a review in July of the site, known as The Cell, to ensure security procedures are strong enough.
That review, led by Prime Minister David Cameron's national security adviser Kim Darroch, will give Huawei the all-clear, but will recommend tighter controls at the site, the person familiar with the issue told Reuters, without giving details of the extra checks.
Parliament's security committee recommended in June that intelligence officials work at the center.
Cameron's spokesman said the report would be published shortly and he would make no further comment until then.
Cameron, visiting China on a trade trip, said Britain and China should hold talks on cyber security and that he had raised the issue with Chinese Premier Li Keqiang.
"It's an issue of mutual concern and one that we should be discussing," Cameron told the BBC.
The British government has described cyber attacks as one of its biggest security threats.
The British parliament's intelligence committee said in a report in June that UK security checks were "insufficiently robust" when Huawei began work on the country's network.
The privately-owned company, founded by a former Chinese army officer, says its products are secure.
It said in a statement: "Huawei shares the same goal as the UK government and the ISC (Intelligence and Security Committee in parliament) in raising the standards of cyber security in the UK and ensuring that network technology benefits consumers in the UK.
"For Huawei this commitment also extends to all of the 140 countries in which we operate. Ahead of the report's recommendations it is inappropriate for us to comment further."
(Writing by Peter Griffiths; Editing by Guy Falconbridge and Mark Potter)