London - Despite fears of Chinese spying and hacking, the British government gave the go-ahead Tuesday for China to build a massive new embassy in the heart of London. The mega-embassy's designs will see it occupy an entire city block with a view of The Shard, Britain's tallest building on the banks of the Thames.

It will be China's biggest embassy in Europe.

The U.K. government's decision ended a saga that began in 2018 with Beijing's purchase for nearly $350 million of the former Royal Mint building, which used to produce Britain's money and long served as a symbol of the U.K.'s economic might. After the COVID pandemic, the U.K. government — amid multiple changes in leadership — delayed final approval for the project as intelligence experts, members of the Chinese diaspora, and would-be future neighbors of the new embassy raised concerns and protested. 

Sir Richard Dearlove, the former head of the British foreign intelligence service MI6, previously called on the government to reject China's plans to build on the site, which sits on top of buried cables that transmit sensitive financial and commercial data across the U.K. capital.

"Having a Chinese embassy sitting on top of those cables, which could in extremis be attacked, is a significant problem," he told CBS News in early December, when a previous deadline for the government's decision was pushed to this month. 

With a larger physical presence, Beijing could also employ more Chinese diplomatic staff, who would have freedom of movement in Britain thanks to diplomatic visas.

"If it's got a very large embassy, there could be a very large number, and then going off to third countries, ostensibly on holiday or whatever, or to travel, and doing stuff outside the country to which they're accredited," said Dearlove.

"They're purporting to be ordinary diplomats, ordinary attaches, who are actually highly trained intelligence personnel," he said.

U.K. officials respond to concerns about Chinese Embassy

In response to intelligence concerns, the heads of the domestic intelligence agency MI5 and GCHQ, the intelligence, cyber and security agency, on Tuesday admitted that British national security risks tied to China's new embassy could not be totally eliminated and implied attempting to do so would be impossible. 

"It would be irrational to drive 'embassy generated risk' down to zero when numerous other threat vectors are so central to the national security risks we face in the present era," GCHQ Director Anne Keast-Butler and MI5 Director-General Sir Ken McCallum said in a joint letter to government ministers. They also said that the work to mitigate risks had been "expert, professional and proportionate."

Separately, on political grounds, the 240-page report by the U.K. Ministry of Housing, Communities and Local Government said decisions about embassy approval should not be decided based on a country's style of governance.

"Planning law and national and development plan policies, and for its signatories, the Vienna Convention which is founded on reciprocity, are nation-neutral," the report says. "It is not possible to discriminate against a use on the basis of the anticipated user. Otherwise that could give rise to an untenable situation of the embassy of one nation being permitted but another nations embassy being refused."

"In this regard, any ethical or similar objection to the provision of an embassy for a specific country cannot be a material planning consideration," the report says. "It would not be lawful to refuse permission simply because it would be for a Chinese Embassy … The same would hold for any other specific country seeking an embassy use through the planning system."

Chinese Embassy's approval sparks criticism

Despite the ministry's report, British opposition parties criticized approval of the embassy as an "act of cowardice" and Prime Minister Keir Starmer's "biggest mistake yet."

Anti-Beijing activist and dissident groups reacted with disappointment and anger. As China's government has cracked down on freedoms in Hong Kong, Tibet and China's Muslim-majority region of Xinjiang in its northwest, many sought refuge in the U.K. 

"It is definitely deeply disappointing but not surprising," said Carmen Lau, a former Hong Kong politician living in self-exile in London.

She said she believed the U.K. approved the embassy so that Starmer could keep his planned trip to Beijing later this month. The U.K. has also been trying to get approval for a new embassy in Beijing. 

"But to me it is a disproportionate deal," said Lau. "China's economic favour / return to the UK isn't worth giving up on a huge chunk of national security concern."

The U.K. has also become home to the world's largest Hong Kong diaspora community with an estimated nearly 200,000 having fled in the past five years after the failed mass democracy protests in 2019. 

"(The) Hong Kong diaspora would definitely be affected," said Lau. "I've heard people planning to relocate (into) secondary exile. The reason is that we have been seeing Chinese agents and the PRC (People's Republic of China) itself becoming bolder in reaching us in the UK."

"This embassy will be a daily reminder of China's increased presence, increased influence, over the UK government," said Tenzin Rabga Tashi of Tibetan advocacy group Free Tibet.

"It will be a reminder for my community members to watch how they behave, to not be as active in advocacy," Tashi said. "You know, many of them have family inside Tibet so they won't be able to as freely be comfortable living in the UK knowing that China has more eyes on them, not just them but their friends, their families. This system of fear, this system of repression has increased in the UK and it will continue to expand as long as China's mega embassy is here." 

"I am dismayed … absolutely furious," said Rahima Mahmut, executive director of human rights charity Stop Uyghur Genocide. 

Human rights groups say that, starting in 2014, up to a million Muslim Uyghur people were rounded up in Xinjiang and imprisoned. Those who could escaped, and thousands settled in the United States.

"The approval of the mega embassy is deeply dismaying and feels like a profound betrayal," Mahmut said.

After the British government gave its approval, the Chinese Embassy in London said in a statement that it had noted that its application had been approved.