Some industry-watchers believe it will benefit the wider rollout of next-generation mobile data services.
Britain will allow "high risk vendors" like Chinese telecoms giant Huawei a limited role in building its 5G networks, the government said on Tuesday.
NICKY MORGAN, UK DIGITAL MINISTER
"We want world-class connectivity as soon as possible but this must not be at the expense of our national security. High risk vendors never have been and never will be in our most sensitive networks.
"The government has reviewed the supply chain for telecoms networks and concluded today it is necessary to have tight restrictions on the presence of high risk vendors."
CIARAN MARTIN, CHIEF EXECUTIVE, UK NATIONAL CYBER SECURITY CENTRE
"This package will ensure that the UK has a very strong, practical and technically sound framework for digital security in the years ahead.
"High-risk vendors have never been - and never will be - in our most sensitive networks.
"Taken together, these measures add up to a very strong framework for digital security."
US SENATOR TOM COTTON, ARKANSAS REPUBLICAN.
"This decision is deeply disappointing for American supporters of the Special Relationship. I fear London has freed itself from Brussels only to cede sovereignty to Beijing. Allowing Huawei to the build the UK's 5G networks today is like allowing the KGB to build its telephone network during the Cold War.
"The CCP will now have a foothold to conduct pervasive espionage on British society and has increased economic and political leverage over the United Kingdom. The short-term savings aren't worth the long-term costs. In light of this decision, the U.S. Director of National Intelligence should conduct a thorough review of US-UK intelligence-sharing."
VICTOR ZHANG, VICE PRESIDENT, HUAWEI
"Huawei is reassured by the UK government's confirmation that we can continue working with our customers to keep the 5G roll-out on track. This evidence-based decision will result in a more advanced, more secure and more cost-effective telecoms infrastructure that is fit for the future. It gives the UK access to world-leading technology and ensures a competitive market."
TRACY BRABIN, UK OPPOSITION LABOUR PARTY SPOKESWOMAN FOR DIGITAL, CULTURE AND MEDIA
"The Tories refused to take our technological sovereignty seriously and failed to invest in home-grown alternatives to Huawei. As a result they're in the ludicrous position of having to choose between the UK's security concerns and our infrastructure needs."
JOHN NICOLSON, SCOTTISH NATIONAL PARTY LAWMAKER
"Many will think that this decision is born out of weakness - it has come about as a result of short termism and decades of under-investment. The prime minister has gone for the cheapest, least secure option, but it doesn't take a genius to work out why Huawei is so competitive. It is the Chinese communist party branded as a company."
DAVID DAVIS, UK CONSERVATIVE LAWMAKER AND FORMER BREXIT MINISTER
"I do think Huawei should be banned from our networks. It was founded by a member of the PLA (People's Liberation Army), even if it were not an arm of Chinese government, a 2017 law requires they take instruction from the Chinese intelligence agency, and in the future the size and the complexity that we are trying to protect against is enormous ... I'm afraid the only way to protect our safety is to ban it."
IAIN DUNCAN SMITH, UK CONSERVATIVE LAWMAKER AND FORMER PARTY LEADER
"I am deeply disappointed in this decision now. I have spoken at length in the past to security officials and they will always tell you that defending in cyber security is a game of catch-up, always catch up against the next algorithm change. You can never guarantee that you spot it, sometimes until too late."
PENNY MORDAUNT, UK CONSERVATIVE LAWMAKER AND FORMER DEFENCE MINISTER
"Excluding high-risk vendors from any provision is one way we can encourage companies and states that do not operate under international norms and business standards. That is why this decision is regrettable and ... this country must never find itself in this position ever again."
TOM TUGENDHAT, UK CONSERVATIVE FORMER HEAD OF PARLIAMENT'S FOREIGN AFFAIRS COMMITTEE
"It is very hard for me to welcome (Foreign minister Dominic Raab's) statement but I recognise the position that he has arrived at from the position he began with ... What we really want to see here is we want to see a ban, a cap and a cut."
MATTHEW FELL, CHIEF UK POLICY DIRECTOR, CONFEDERATION OF BRITISH INDUSTRY (CBI) EMPLOYERS GROUP
"It's right that the government took its time to assess the merits of Huawei's involvement in the UK's 5G network. This solution appears a sensible compromise that gives the UK access to cutting-edge technology, whilst building in appropriate checks and balances around security."
TIM MORRISON, FORMER US NATIONAL SECURITY COUNCIL OFFICIAL
"Because this announcement appears to depend on the passage of legislation, there is still time for back-benchers in both parties to save the Special Relationship and the privacy rights of Britons if they vote to block this mistake by the government."
NEWT GINGRICH, FORMER SPEAKER OF US HOUSE OF REPRESENTATIVES
"British decision to accept Huawei for 5G is a major defeat for the United (States). How big does Huawei have to get and how many countries have to sign with Huawei for the US government to realize we are losing the internet to China? This is becoming an enormous strategic defeat."
NIGEL FARAGE, LEADER OF UK'S BREXIT PARTY
"A terrible decision. This is bad for national security, an insult to our closest friends and a sign that our establishment has been paid off by China."
"While Vodafone UK does not use Huawei in its core - the intelligent part of the network - it will now analyse the potential impact of today's decision on the non-core elements of its network (masts and transmission links).
"Vodafone UK uses a mix of Huawei, Ericsson and Nokia equipment for its 4G and 5G masts, and we continue to believe that the use of a wide range of equipment vendors is the best way to safeguard the delivery of services to all mobile customers."
Reporting by UK bureau and Alex Alper in WASHINGTON, compiled by Andy Bruce