Reuters said the report, which was signed off by the country's Government Communications Headquarters spy agency, was released after it was told that UK security officials could now only offer limited assurances on the security of Huawei's UK operations.
But remedial issues are being taken, with a UK National Cyber Security Centre spokesperson saying that a program to sort out an issue with checking internal product code was underway and would be completed by mid-2020.
In February, the UK National Cyber Security Centre said it would continue to work with Huawei, as it would benefit from such collaboration.
In Australia, the company is vying for a role in building 5G networks, a bid which the government is likely to deny.
In Britain, Huawei has a Cyber Security Evaluation Centre alongside members of GCHQ, the intelligence and security organisation responsible for providing signals intelligence and information assurance.
The Huawei unit is known as The Cell and monitors threats and backdoors in its own hardware, with the researchers being overseen by the NCSC.
Reuters quoted the British report as saying: "Identification of shortcomings in Huawei’s engineering processes have exposed new risks in the UK telecommunication networks and long-term challenges in mitigation and management."
It said there were technical issues which got in the way of researchers being able to check internal code of products.
Huawei said it welcomed the main findings of the report. "The report concludes that HCSEC’s operational independence is both robust and effective. The Oversight Board has identified some areas for improvement in our engineering processes,” a Huawei spokesman said.
“We are grateful for this feedback and are committed to addressing these issues. Cyber security remains Huawei’s top priority, and we will continue to actively improve our engineering processes and risk management systems.”