A final decision on the new nuclear plant at Hinkley Point, Somerset, could be announced next week during Chinese president Xi Jinping's state visit.
Security sources have told The Times the scheme poses a threat to national security - and a senior Tory MP has called for an inquiry.
But No 10 said it would not sign the deal if it thought security was a risk.
Chancellor George Osborne has already announced a Â£2bn government guarantee to secure Chinese funding for the Hinkley Point C nuclear power station, to be jointly built with French energy giant EDF at an estimated cost of Â£24.5bn.
The final go-ahead for the deal could be announced next week - paving the way for a second new reactor to built by the Chinese and French consortium at Sizewell, in Suffolk.
If an agreement is reached, work could then start on the first Chinese-designed and built nuclear reactor in Europe, at Bradwell, in Essex, where a previous British-built reactor is in the process of being decommissioned.
Caroline Baylon, a cyber security specialist at the Chatham House think tank, says Chinese investment is a "good thing" for the UK but "when it comes to very sensitive sectors of the economy we have to be very, very careful".
Some argue that China would not attack its own nuclear plants, she tells BBC News, but it could obtain access to UK technologies that would give it an insight into any vulnerabilities in critical infrastructure systems.
China is "well known for cyber-espionage" and, in common with other advanced nations, is already seeking out such vulnerabilities to allow it to hide potentially malicious software that could be activated later, says Ms Baylon, who recently co-authored a report on cyber-security at civil nuclear facilities.
The trend in the global nuclear industry is towards the nationalisation of nuclear power, or at least the sourcing of components from "friendly countries," to safeguard critical systems - but the UK takes a very "permissive" attitude to the issue that is potentially "very dangerous," she warns.
There is a "gentleman's agreement" between nations not to attack infrastructure, but Ms Baylon adds that "if the international situation changes, the UK may find itself in a tricky spot if this Chinese deal goes through. Today's alliances are not tomorrow's alliances."
Construction of the first Hualong One reactor began in May in China's Fujian province, according to World Nuclear News.
Gaining regulatory approval from the UK authorities for the design would be a major boost to the Chinese National Nuclear Corporation's hopes of exporting the technology around the world.
But senior UK defence and security sources reportedly are concerned that the state-controlled company, which helped develop China's nuclear weapons, poses a national security risk.
They fear "trapdoors or backdoors" could be inserted into IT systems, allowing Beijing to bypass British security measures.
Responding to concerns, David Cameron's official spokesman said: "We have the Office for Nuclear Regulation - which is our independent nuclear regulator - which has very strict regulations in place in terms of how nuclear plants are operated and the security around them and that has done all the due diligence and is content with things as they stand.
"But we will continue to ensure that all security and other regulations are followed at all times."
Pressed about the warnings from the security services, the prime minister's spokesman said: "We wouldn't be pursing this course of action if we felt there was a risk to security."
Bernard Jenkin, Conservative MP for Harwich and North Essex, where the Bradwell plant would be built, has called for the government to produce a "comprehensive assessment of the national security implications" of the Chinese scheme.
If the government does not agree to his demand, and the Joint Committee on National Security Strategy does not take it on, he will invite the Commons Public Administration select committee, of which he is chairman, to look at the issue, he told BBC News.
He is concerned the Chinese deal is being presented as a "fait accompli" and that George Osborne is negotiating from a "position of weakness" because "we've allowed our internal nuclear capability to degrade".
He is also concerned that new infrastructure commitments could be allowed to bypass the usual planning procedures - and that the government is by-passing national security concerns because "they don't want to talk about it".
Downing Street is playing down security fears about plans to give China a stake in Britain's nuclear power industry.