China has for several years been trying to relocate its embassy, currently in the British capital's upmarket Marylebone district, to a sprawling historic site in the shadow of the Tower of London.
The move east to the complex opposite the UNESCO World Heritage site housing the Tower, and adjacent to the iconic Tower Bridge, has sparked fierce opposition from nearby residents, rights groups, China-hawks and others.
Already rejected by local officials, it now appears to be a key issue in bilateral ties, and featured in early talks between President Xi Jinping and Prime Minister Keir Starmer. It comes amid a new row over allegations of suspected spying by a Chinese businessman with links to Prince Andrew.
The British leader, elected in July, wants more engagement with Beijing, following years of deteriorating relations over various issues, in particular China's rights crackdown in Hong Kong.
Last month Starmer became the first UK prime minister since 2018 to meet Xi, when the pair held talks at the G20 in Brazil.
With TV cameras rolling, he noted Xi had raised the embassy in an earlier call and reassured him that his government had "taken action" by "calling in" its embassy application.
The decision means a national planning inspector will now hold a public inquiry into the scheme, but Communities Secretary Angela Rayner will make the final decision.
Governments can "call in" developments on various grounds, including issues going beyond "local importance" and impacting other governments or national security.
- 'Shocked' -
Despite Starmer also telling Xi that "we have to follow the legal process and timeline", the intervention has unnerved opponents of the new embassy.
"I was a bit shocked," said exiled Hong Kong dissident Simon Cheng, who lives near the proposed embassy.
"I knew that China's... plans would be quite important (in bilateral relations). I hadn't ever thought that it would be escalated to the top level."
He worries Starmer's emphasis on economic growth, and improved China ties, could trump other considerations.
A former British consulate staffer in Hong Kong granted UK asylum after allegedly being tortured by Chinese secret police, Cheng also fears "massive surveillance" at the new site.
Housing the Royal Mint -- the official maker of British coins -- for nearly two centuries, it was earlier home to a 1348-built Cistercian abbey but is currently derelict.
Beijing bought the site for a reported $327 million in 2018.
It comprises several "listed buildings" of historical note, and before the government's intervention, any changes had required permission from the local authority, Tower Hamlets Council.
In 2022 its councillors unanimously rejected China's plans, which include designs by the renowned David Chipperfield Architects firm. In July, Beijing resubmitted the proposals almost entirely unchanged.
Conservative councillor Peter Golds has been a persistent opponent.
"Can you imagine the French or the Italians permitting the most famous World Heritage site in their country to have a gigantic embassy next to it? And not just any embassy!" he told AFP.
"It's a prestige site... it'd be a bit like us going to the Forbidden City," he added, referring to Beijing's imperial palace complex. "What an insult!"
- 'Overpowering' -
The site adjoins a housing complex, and residents are most concerned about security implications.
"A small explosion from a car or a van would cause devastation," Dave Lake, who leads a residents' association fighting the plans, told AFP, voicing concerns that the embassy could become a focus of anti-China protests.
Residents recently began fundraising to pay for the legal representation now needed to maintain what Lake considers a David-versus-Goliath battle.
"It's overpowering -- it's almost as if they're stamping on you," he said.
There are reports Beijing intends to link the issue with British plans to redevelop its embassy and ambassador's residence there.
A Chinese embassy statement said "host countries have the international obligation to support and facilitate the building of the premises of diplomatic missions".
It added approval would help promote "friendship between the Chinese and British people and the development of bilateral relations".
James Jennion, associate fellow at the British Foreign Policy Group, said it was "clearly a priority" for China, noting embassies are "status symbols".
He added the government "calling in" the application "made this more of a "bilateral issue" as well as likely creating future "domestic headaches".
"This will make it tougher to assess based on practical factors, and will certainly be a defining feature of UK-China relations until a decision is made."
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