Labour has been sensationally accused of “appeasing” China by nodding plans for a so-called mega-embassy in the heart of London through the planning system.

Major security concerns have been flagged as Beijing seeks to create a 700,000 sq ft base on the site of former Royal Mint buildings.

Documents show the sprawling complex includes “two suites of anonymous unlabelled basement rooms and a tunnel”, with their exact use redacted for security reasons.

The sinister plans have sparked worrisome in Washington with congressmen John Moolenaar and Chris Smith warning the UK Government would be “gifting the Chinese Communist government with the largest embassy in Europe” if the application is given the green light.

In a letter to Lord Peter Mandelson, the British Ambassador to the United States, they described the new diplomatic hub as a “counterproductive and unearned reward”.

Plans for the embassy, near the Tower of London, were blocked by the previous government after British intelligence agencies and Scotland Yard objected on the grounds that sensitive data cables that run nearby could be vulnerable to attack by Chinese spies.

Diplomatic and security tensions have heightened after the fallout from US President Donald Trump’s trade tariffs and the economic war between the world’s biggest superpowers.

Beijing’s application was revived in the run-up to Chancellor Rachel Reeves' visit to China in January, with sources claiming President Xi Jinping personally lobbying for its approval.

Number 10 has refused to disclose whether it is backing the embassy plans to boost trading relations with the Chinese amid the global turmoil sparked by President’s Trump's trade war.

But the Tories have accused Labour of adopting a “policy of appeasement towards state bullying and intimidation” from Beijing, saying that the “dungeons” could be used for eavesdropping or even interrogation.

Shadow levelling up secretary Kevin Hollinrake said: “Downing Street has been caught red-handed in an attempt to ram this mega- embassy through the planning system.

“Labour have disregarded democratic concerns – through a contempt for local democracy, and by failing to defend free speech in Britain.

'It would be a barbarous irony that a site so close to the medieval Tower of London could become a modern-day dungeon under a Starmer Government.”

In his letter to the Prime Minister Mr Hollinrake said the lack of information about the dungeons in planning documents was “striking”, adding: “Why does the use of the basement rooms need to be redacted, given they are not in public sight and there is no public access?

“This subterranean zone will undeniably be used for intelligence work by the Chinese Communist Party and its arm, the United Front Work Department.

“But there is also a chilling prospect that it could be used for the abduction, intimidation or torture of anti-Chinese dissidents living in the United Kingdom.”

The Chinese government purchased Royal Mint Court – in the borough of Tower Hamlets – in 2018, which was originally the site of a medieval abbey before it was rebuilt to house the Royal Mint in 1830.

Their current embassy – a grand complex in Marylebone – was established in 1877.

Tom Tugendhat, the former UK security minister and former chair of the parliamentary China Research Group, criticised the development earlier this month as “a grave mistake”.

He added: “China already has an embassy in London. This proposed move is an echo of the past. The Golden Era is over.”