CANBERRA China denied on Friday that its spies attempted to hack into the phone and computer of Australian Prime Minister Kevin Rudd during a visit to Beijing, amid growing unease in Canberra over Chinese investment.
The Australian newspaper said on Friday China directly targeted Rudd during a visit to China last August. It said Rudd and his staff were under constant cyber attack from authorities trying to access communications gear.
"It is a totally groundless saying and not worth any comment, this so-called cyber spying," Chinese embassy spokesman Jin Liu told Reuters.
The newspaper, citing intelligence sources, said Beijing's blatant electronic espionage had alarmed Rudd's centre-left government and led to a tightening of communications security for senior government figures travelling to China.
Rudd, speaking in London after the G20 meeting of leading economies, said had not been advised of a specific attack, but the government was wary of cyber espionage.
"The (December) national security statement clearly identified the threat of cyber attacks," Rudd told reporters.
A defence planning paper due out later this month is expected to deal with cyber espionage, following concerns raised by former diplomat Rudd last year.
Anti-Chinese sentiment has been building in Australia with opposition lawmakers accusing the Mandarin-speaking prime minister of being a "roving ambassador" for China and too close to senior figures in Beijing.
China's Australia ambassador on Thursday defended Chinese investment in local resource firms as Canberra considers whether to approve a $19.5 billion (13.2 billion pound) tie-up between state-owned metals firm Chinalco and mining giant Rio Tinto.
Opposition lawmakers have accused Rudd's Labour of being prepared to "sell the farm," losing control of vital resource assets sought by energy-hungry China.
Rio Tinto may also have been the target of a Chinese cyber attack in the early stages of Chinalco's bid for the Anglo-Australian miner, the Australian said, citing government figures, who called the attacks "incessant and enduring."
The Chinalco deal with Anglo-Australian mining giant Rio is being considered by Australia's foreign investment watchdog, with some politicians from both the centre-left ruling party and the conservative opposition calling for it to be rejected.
An investment by another state-owned Chinese firm, Minmetals, in Australian miner OZ Minerals was rejected by Treasurer Wayne Swan last week on national security grounds, although a revised $1.2 billion bid that addresses those same concerns is back with the review board.
(Reporting by Rob Taylor; Editing by Valerie Lee)