MI5 has been ordered to “refocus” its efforts on targeting spies rather than terrorists following a major recruitment drive by Russia, China and Iran, The Telegraph can reveal.

Russia’s war in Ukraine, the growing number of Chinese agents operating in the UK and the use of organised criminals by Iran have shifted the security service’s main targets significantly.

While domestic and international terrorism remain a priority for MI5, more resources are now being pushed towards Russian, Chinese and Iranian counter-espionage operations, government sources have said.

MI5 has been asked by ministers to “refocus a lot of their efforts on the espionage threat, particularly the state threat from China, Russia and more recently Iran as well”, a senior government source said.

They insisted that “counter-terrorism has not been deprioritised but this has been prioritised alongside it”, adding that “their workload has definitely shifted in that direction”.

The source pointed out that in the wake of the 2018 Salisbury Novichok attack, Russia “lost a large chunk of their intelligence officers overnight” and has since been trying to recruit new assets to plug the gaps.

Britain expelled 23 Russian spies as part of its “full and robust response” to the poisoning of former double agent Sergei Skripal and his daughter Yulia.

The source went on to explain that Britain’s support for Ukraine in the war against Russia has also led to increased spying activity. 

“The more you step out, the more you find yourself in their crosshairs,” they said.

In May, it emerged that Russia was recruiting violent Right-wing extremists to conduct sabotage attacks in Europe and the UK, fuelling concerns among intelligence chiefs.

The Telegraph also understands that the number of Chinese agents employed in intelligence gathering in the UK is now regarded as “unquantifiable”.

Intelligence sources said that Chinese agents are active in academia, among both students and lecturers, in business and even the arts.

In some cases, those gathering information may not be aware that they are being exploited for intelligence reasons by the Chinese state.

The head of MI5 said last year that 20,000 Britons had been approached by Chinese state actors on LinkedIn in the hope of stealing industrial or technological secrets.

Ken McCallum, MI5 director-general, said industrial espionage was happening at “real scale”, and he estimated that 10,000 UK businesses were at risk, particularly in industries where China was trying to get ahead such as artificial intelligence, quantum computing or synthetic biology.

A second government source told National Security News: “MI5 has limited resources so resources have to be prioritised. The terrorist threat level remains ‘substantial’ which means an attack is likely but in reality the challenges currently posed by China and Russia are more pressing.”

The source added that as many as 20 Chinese embassy officials in the UK were likely to be operating as spies.

“But the numbers of agents, civilians who have been recruited by the Chinese intelligence services may run into the hundreds of thousands,” he added.

“There are probably people in the UK who have no idea that they are supplying intelligence to the Chinese government. These may be Chinese nationals working or studying in the UK or British citizens.”

Iran is also believed to be using organised crime gangs to conduct intimidation operations and plot assassinations in the UK. 

Last year, Mr McCallum warned that Iranian-backed terror attacks in the UK were more likely in the wake of the war in Israel.

The current national terror threat level is “substantial”, meaning security officials believe an attack is likely. It was lowered from “severe” in 2022, when officials believed an attack was “highly likely” following a spate of high-profile incidents across the UK.

Mr McCallum is expected to address the growing espionage threat posed by so-called hostile states and non-state actors publicly later this year, highlighting that the espionage threats posed by Russia, China and Iran have rarely been greater in the last 50 years.

Last month, Parliament’s joint committee on the national security strategy warned that Britain “must be prepared for the possibility of foreign interference” by China, Russia and Iran during the general election.

‘UK significant target for China’

Col Philip Ingram, a former Army intelligence officer added: “Quantifying the number of Chinese intelligence sources in the UK is impossible.

“Article 7 of China’s national intelligence law states that all Chinese organisations and citizens should ‘support, assist and cooperate’ with Chinese intelligence efforts, meaning every citizen could be used overtly or without their knowledge by the Chinese state to gather information.

“The UK is a significant target for China given its political position in the UN, financial position in global economics, reputation for global research and technology and military position as a nuclear power with a global military reach.

“It will be running significant espionage operating from the Chinese embassy but many other operations will be run remotely from China exploiting opportunities online.

“There will be many unwitting agents of the Chinese state in business, academia or government departments across the country.”