The NCSC's conclusion, reported by London's Financial Times on Sunday, was conveyed to the paper by two individuals said to be familiar with the agency's finding and said there were ways to limit the risks from using the company's gear in future ultra-fast networks.
The conclusion was characterised as a "serious blow" to ongoing American efforts to persuade European and other countries not to use Chinese equipment in 5G networks.
Huawei has set up a Cyber Security Evaluation Centre where its staff work alongside members of the NCSC to sort out any issues perceived as causing security issues for British networks. Each year, the CSEC's Oversight Board issues a report, outlining issues, if any.
Last week, Robert Hannigan, the former head of Government Communications Headquarters, Britain's top spy agency, wrote in an op-ed in the FT that statements claiming that the use of any Chinese technology in any part of a 5G network represented an unacceptable risk were nonsense.
Hannigan said, in part that Western countries should accept that China would be a global tech power in the future and start managing the risk immediately, rather than pretend that the West could turn as blind eye to China's inevitable technological rise.
Sunday's report quoted one of the people it cited as saying the British conclusion would influence European decision-making given that the UK is part of the Five Eyes intelligence-sharing partnership with the US that also includes Canada, Australia and New Zealand.
The US has been campaigning for at least the last two years to try and get countries that it considers allies not to use Huawei equipment in the rollout of 5G networks. Australia has bowed to these wishes, as has New Zealand.
As iTWire reported last Wednesday, US President Donald Trump was said to be ready to issue an executive order last week banning the use of telecommunications equipment from Chinese companies in American wireless networks.
The source told the newspaper: "Other nations can make the argument that if the British are confident of mitigation against national security threats then they can also reassure their publics and the US administration that they are acting in a prudent manner in continuing to allow their telecommunications service providers to use Chinese components as long as they take the kinds of precautions recommended by the British.”
iTWire has contacted the NCSC for further comment.