Peers have defeated the Government in backing a move aimed at strengthening the nation’s telecoms security by ensuring a diverse supply chain.

The House of Lords supported by 180 votes to 176, majority four, a legislative change that would require the Government to provide an annual update on network diversification.

The Telecommunications (Security) Bill, currently going through the upper chamber, will force providers to stop installing equipment by the Chinese phone-maker Huawei in the UK’s 5G networks and also sets out a road map to remove high-risk vendors altogether.

Stressing the need for a range of providers, Labour frontbencher Baroness Merron said: “There is wide cross-party support for the principle that our networks will not be secure if the supply chain is not diversified.”

She added: “Once Huawei is removed, it leaves the UK with effectively only two service providers. This is a matter of the highest concern.

“We need and must have a diversified supply chain. This is absolutely crucial for network resilience and it will also support British companies and grow British jobs.

“I believe that if the Government fails to accept this amendment of the Bill they are putting our national security at risk.”

She was supported by Liberal Democrat Lord Fox, who said: “Without a diverse supply chain there is no security. The issue of only having two key suppliers… is down to the fact there has been a market failure in this area.”

Responding, digital, culture, media and sport minister Lord Parkinson of Whitley Bay said: “This Bill will create one of the toughest telecoms security regimes in the world. It will protect our networks even as technologies evolve, future-proofing our critical national infrastructure.”

But he added: “While our work on diversification is intended to support our security and resilience ambitions not all diversification is necessarily relevant to security and resilience.”

In a further Government defeat, peers backed by 172 votes to 156, majority 16, a demand for a review of telecoms firms banned on security grounds by another member of the Five Eyes intelligence alliance, that along with Britain is made up of Australia, Canada, New Zealand and the United States.

Labour frontbencher Lord Coaker said: “It absolutely beggars belief that the Government is resisting an amendment that says if one of the Five Eyes thinks that there is a problem we should do something about it.”

Human rights campaigner Lord Alton of Liverpool, an independent crossbencher, said: “This amendment would both strengthen international action and bolster UK resilience and security.”

Tory peer Lord Blencathra said: “I believe this will be another small warning shot to China that we will start to stand up to their aggression.”

But for the Government, Lord Parkinson told peers security measures taken in one country may not be appropriate in another.

He said: “The Bill enables the Secretary of State to consider a decision by a Five Eyes partner, indeed by any other international partner, to ban a vendor on security grounds.”

He added: “The Government’s approach towards national security needs to remain flexible and adaptable to future challenges.

“Every country’s approach to national security will be different. Security measures taken in one country might not always be appropriate in another.”