Two men have been arrested under the Official Secrets Act amid reports that a parliamentary researcher spied for China.
The researcher has links to several senior Tory MPs and has been arrested on suspicion of spying for China, according to The Sunday Times.
He was arrested along with another man by officers on 13 March, the newspaper reported.
The researcher, who is in his 20s, is understood to have had links to security minister Tom Tugendhat, foreign affairs committee chairwoman Alicia Kearns and other senior Tory MPs.
The MPs he is linked to are privy to classified or highly sensitive information.
A senior Whitehall source told The Sunday Times: "This is a major escalation by China. We have never seen anything like this before."
Officers from the Metropolitan Police's Counter Terrorism Command, which oversees espionage-related offences, are investigating.
One of the men, in his 30s, was arrested in Oxfordshire on 13 March, while the other, in his 20s, was arrested in Edinburgh, Scotland Yard said.
"Searches were also carried out at both the residential properties, as well as at a third address in east London," a statement from the force said.
Both men were held at a south London police station until being bailed until early October.
Mr Tugendhat is said not to have had any contact with the researcher since before he became security minister in September last year.
Ms Kearns declined to comment, adding: "While I recognise the public interest, we all have a duty to ensure any work of the authorities is not jeopardised."
The Inter-Parliamentary Alliance on China pressure group said it was "appalled at reports of the infiltration of the UK Parliament by someone allegedly acting on behalf of the People's Republic of China".
Downing Street said it does not comment on security matters.
The House of Commons has been contacted.
Conservative MP Iain Duncan Smith has tweeted: "If true, this is very serious and of great concern. It shows that we cannot afford to be complacent about the threat that the CCP [Chinese Communist Party] poses to the function of Parliament and our democratic way of life."
China has 'penetrated the UK economy'
In July, the Intelligence and Security Committee (ISC) said China targets the UK "prolifically and aggressively" in a way that poses a "challenge" for British intelligence agencies.
The ISC, made up of cross-party MPs, published a report saying China had managed to "successfully penetrate every sector of the UK's economy".
In a separate case in January 2022, MI5 warned MPs that a Chinese government agent has been working in parliament "to subvert the processes".
A letter was sent to MPs by Speaker Sir Lindsay Hoyle who said MI5 warned him a woman called Christine Lee has been "engaged in political interference activities on behalf of the Chinese Communist Party, engaging with members here at parliament".
Lee, 59, who denies wrongdoing and is suing MI5, had donated almost £500,000 to Barry Gardiner, Labour's former shadow international trade secretary.