The House Intelligence Committee in US has recommended that two Chinese telco giants Huawei and ZTE should be kept out of contracts and acquisitions in the US as they pose security threat, reports AFP.

The draft report of the panel which is the outcome of a yearlong congressional investigation suggested that these two firms are under the influence of the Chinese government and cannot be trusted. 

The report is a huge blow to Huawei as it has already been banned in Australia from participating in a bid for broadband project due to security threat. Similar fears are being expressed in New Zealand.

"China has the means, opportunity and motive to use telecommunications companies for malicious purposes," the committee said in its report.

"Based on available classified and unclassified information, Huawei and ZTE cannot be trusted to be free of foreign state influence and thus pose a security threat to the United States and to our systems."

The draft report is due to be published Monday.

"Based on available classified and unclassified information, Huawei and ZTE cannot be trusted to be free of foreign state influence and thus pose a security threat to the United States and to our systems," the draft document reviewed by AFP said.

"The integrity and independence of Huawei's organization and business practices are trusted and respected across almost 150 markets," Huawei vice president William Plummer said in an emailed statement.

"Purporting that Huawei is somehow uniquely vulnerable to cyber mischief ignores technical and commercial realities, recklessly threatens American jobs and innovation, does nothing to protect national security, and should be exposed as dangerous political distractions."