The Federal Government has banned Chinese technology giant Huawei for fear that it could compromise national security.


The Federal Government has confirmed Huawei has been locked out from the tendering process from as early as Christmas, saying that it has the responsibility to protect the integrity of the NBN and the information carried on it.


Former Foreign Affairs Minister Alexander Downer told ABC radio he felt the move was ‘absurd’ and out of step in the emerging relationship between Australia and China.


"This whole concept of Huawei being involved in cyber warfare - presumably that would be based on the fact the company comes from China," Mr Downer said.


"This is a very straightforward, albeit very large company doing an astonishingly good job in terms of providing telecommunications to a world hungry for improved telecommunications.”


The company has been accused of stealing information through its contracts, and has been identified as a Cyberspace security threat by the United States Office of National Counterintelligence Executive.


Despite a somewhat murky connection between the company and the Chinese Government, Huawei has stringently denied any undue influence exists in its commercial operations.