BERLIN, Dec 17 (Reuters) - Chancellor Angela Merkel's conservatives and their Social Democrat partners have delayed until next year a decision on security rules for Germany's 5G network that could bar China's Huawei, a highly divisive issue in an unhappy alliance.
Merkel's right-left government, under pressure from the United States to bar Huawei, wants to toughen up technical certification and scrutiny of telecoms equipment suppliers, without excluding any specific country or vendor.
Social Democrat (SPD) lawmakers on Tuesday backed an internal proposal that, if adopted by the government, could effectively translate into shutting out Huawei. Lawmakers said their goal was nevertheless to reach a common position with Merkel's CDU/CSU group.
"I think we will have a solution in January," said SPD lawmaker Jens Zimmermann. "We will have a common blueprint and it will be considerably more severe."
He was referring to rules for the build-out of 5G mobile networks finalised by Merkel's government in October that foresaw an evaluation of technical and other criteria and was largely interpreted as keeping the door open to Huawei.
Merkel's conservatives are divided on the issue. Hawks opposed to the chancellor's careful approach are eager to go ahead with the SPD's strict standards, which stipulate that suppliers from countries without "constitutional supervision" should be excluded.
Moderates eager to avoid a showdown with Merkel suggested that the stringent security criteria should apply to the core network only.
A paper prepared by moderate conservatives also stipulates that no single company should become dominant by supplying more than 50 percent of the 5G network components. The rules would be stricter for non-EU suppliers.
For interactive graphic on 5G and security risks, click here. tmsnrt.rs/32tVdMI
German operators are all customers of Huawei and have warned that banning the Chinese vendor would add years of delays and billions of dollars in costs to launching 5G networks.
"There is no agreement in the CDU parliamentary faction on the Huawei paper," said Thorsten Frei, deputy leader of the CDU/CSU group in parliament.
"The faction will have a position in the new year. Then there will be talks with our SPD coalition partners on a common position."
One of the main bones of contention is whether the strict rules should just apply to the core 5G network or also include peripheral parts.
The SPD and conservative hawks want the condition of "constitutional supervision" to apply for suppliers of parts for both the core and peripheral network.
The United States says gear provided by Huawei, the leading telecoms equipment vendor with a global market share of 28 percent, contains 'back doors' that would enable China to spy on other countries.
Shenzhen-based Huawei has denied the allegations by the Trump administration, which imposed export controls on Huawei in May, hobbling its smartphone business and raising questions over whether the Chinese company can maintain its market lead.
Writing by Joseph Nasr Editing by Keith Weir