Downing Street is pressing for legislation to make it mandatory for British companies to report attempted takeovers that could give rise to security risks, backed by the threat of criminal sanctions.

Those that fail to do so or ignore the stringent conditions imposed by the government after takeovers could have their directors jailed, disqualified or be fined hundreds of thousands of pounds.

The prime minister also wants “academic partnerships” and research projects to be included under the rules amid concern about links between British universities and Chinese companies.

Rishi Sunak, the chancellor, is said to support the approach.