Plans for a Chinese mega embassy in London could bring “security advantages”, the prime minister’s official spokesperson has said, despite security fears from opponents.

No 10 highlighted the security advantage of consolidating the seven Chinese sites currently dotted around the capital, as the date for a decision on whether to grant planning permission was pushed back for a third time – into the new year.

Some believe China’s mega embassy, if it gets the go-ahead, would be a huge hub in the heart of London for espionage.

However, the government is expected to give the green light to the embassy on 20 January next year.

This is the third time a decision on whether to give the go-ahead for the embassy has been pushed back, and this delay is understood to be so there is more time to consult all those involved.

In a letter seen by one of the groups opposed to the plan, the Interparliamentary Alliance on China, the home secretary and the foreign secretary said they had been working to ensure the “national security issues” associated with the new embassy were addressed.

Shabana Mahmood and Yvette Cooper said their concerns had been resolved as China had agreed it would move all its accredited diplomats in London onto a single site were it to be approved.

On Tuesday, the Prime Minister’s official spokesperson said that consolidation would “clearly bring security advantages” for the UK.

“Should the planning decision for a new embassy be approved, the new embassy would replace seven different sites which currently comprises China’s diplomatic footprint in London, which clearly brings security advantages,” he said.

He added the Home Office and Foreign Office had “provided views on particular security implications, and have been clear throughout that a decision shouldn’t be taken until we affirm that those considerations have been completed or resolved.”

If plans go ahead, the Chinese embassy would be the biggest in Europe, with space to house 200 staff on site, as well as offices and a large basement area.

The site, on Royal Mint Court, would also be close to fibre optic cables carrying vast quantities of highly sensitive data to the City of London.

Suspicions were also raised when planning documents for the embassy had parts of the blueprints blanked out when they were submitted to Tower Hamlets council, marked “redacted for security reasons”.

Back in the summer, the then Deputy Prime Minister Angela Rayner gave China two weeks to explain what those rooms were to be used for – and officials now seem satisfied.

The Chinese Embassy in the UK has previously said the new complex would enhance “mutually beneficial cooperation” between China and Britain, with officials arguing that objections to the site are unjustified.

Prime Minister Sir Keir Starmer focused on the difficult balancing act of UK-China relations in a speech setting out his foreign affairs priorities in the City of London on Monday.

Stressing that China is still a “defining force in technology, trade and global governance”, while still recognising the “reality” that China “poses national security threats”, Sir Keir said he wanted to seize the potential export opportunities around finance, pharmaceuticals and luxury goods.

The head of MI5 has described Chinese state actors as a daily national security threat to the UK, and the security service issued an unusual espionage alert last month about two named Chinese profiles on LinkedIn targeting MPs and parliamentary staff, which China denied.

Shadow housing secretary Sir James Cleverly accused Labour of trying to “steamroller” planning approval through “without proper scrutiny” and despite “the danger it poses to Britain’s national security” because ministers do not have the “backbone to stand up to China”.

“Throughout this process ministers have sought to suppress criticism of the embassy plans,” he said.

“Even our security services have been prevented from submitting private evidence to the inquiry.

“The government must now ensure they can submit their concerns, via a private hearing, safe from the eyes of the regime in Beijing, and it is essential that the authorities have access to the full, unredacted drawings hidden by the Chinese government.”