Keir Starmer appears to have laid the groundwork for a major concession to China, despite using a keynote speech to say Beijing poses “national security threats” to Britain.

With a crucial decision on the Chinese super embassy coming next week, the prime minister used his annual Mansion House speech on foreign policy to express a robust policy towards China while seeking to work with Xi Jinping’s Communist government.

He said: “[China] is a nation of immense scale, ambition and ingenuity. A defining force in technology, trade and global governance. At the same time it also poses national security threats to the UK.

“The UK needs a China policy that recognises this reality. Instead, for years we have blown hot and cold.

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“We had the golden age, which then flipped to an Ice Age. We reject that binary choice.

“So our response will not be driven by fear, nor softened by illusion. It will be grounded in strength, clarity and sober realism.”

The words come amid growing speculation that his government will give the go ahead for the controversial new Chinese super embassy in Royal Mint Court, despite national security concerns.

A decision on the project was postponed until 10 December when communities secretary Steve Reed will announce if he has given it the go ahead.

The issue of relations with Beijing have dogged Sir Keir after he had to defend his government amid claims it was responsible for a trial of two alleged Chinese spies in Parliament collapsed in October.

The government claimed that the failure to designate China as a national security threat at the time of the alleged crimes prevented the trial from going ahead.

But, while Sir Keir’s new policy is very similar to the one pursued by the Tories before, he will insist that it is grounded in a realistic approach.

Describing the absence of engagement with the world’s second biggest economy as “staggering” and “a dereliction of duty”, the prime minister outlined his government’s considered and grown-up approach, saying: “This is not a question of balancing economic and security considerations. We don’t trade off security in one area, for a bit more economic access somewhere else.

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“Protecting our security is non-negotiable – our first duty. But by taking tough steps to keep us secure, we enable ourselves to cooperate in other areas.”

In order to help British business to win their share of the opportunity, the prime minister set out more detail on how the government is delivering predictability for the long-term.

He said: “We’re absolutely clear that when it comes, for example, to defence, AI or our critical national infrastructure, we will always protect our security and our economic interests.

“But we’re also clear that in areas where there is no significant risk, we are going to give businesses the confidence, clarity and support they need to win these opportunities, with all the necessary mitigations in place.

“So in areas like financial and professional services, creative industries, pharmaceuticals, luxury goods and more – Great British success stories – the export opportunities are huge and we will back you to seize them.”

Meanwhile, Sir Keir has indicated that he wants to go further in improving the deal with the EU over Brexit.

He used a speech on Monday to criticse the impact of Brexit on the economy of Brexit. But in his Mansion House address, he ruled out returning to the bloc as members or joining the single market again.

Instead, he made a swipe at Nigel Farage and Reform UK as well as Kemi Badenoch’s Tories for wanting to unpick international relationships by leaving the European Convention of Human Rights (ECHR).

He said: “The Brexit vote was a fair, democratic expression, and I will always respect that.

“But how it was sold and delivered was simply wrong. Wild promises were made to the British people and not fulfilled. We are still dealing with the consequences today.”

He set out how the “corrosive, inward-looking attitude” peddled by those who propose choosing between our allies, leaving the ECHR or even leaving NATO will only take Britain backwards. He will say:

“It offers grievance rather than hope. A declinist vision of a lesser Britain – not a Great Britain.

“Moreover, it is a fatal misreading of the moment. Ducking the fundamental challenge posed by a chaotic world – a world which is more dangerous and unstable than at any point for a generation. Where international events reach directly into our lives, whether we like it or not.”

He added: “In these times, we deliver for Britain by looking outward with renewed purpose and pride. Not by shrinking back. In these times, internationalism is patriotism.”

Since coming to power last year, Sir Keir has been active on the world stage, trumpeting deals with the US, India and the EU and leading the “coalition of the willing” in support of Ukraine.

But he has also faced criticism from his opponents, who accuse him of spending too much time out of the country attending international summits rather than focusing on domestic issues.