THE Ministry of Defence has been the target of a large-scale data breach, it is understood.

A third-party payroll system has been hacked, potentially compromising the bank details of all serving armed forces personnel and some veterans. A very small number of addresses may also have been accessed.

The department took immediate action when it discovered the breach, taking the external network – operated by a contractor – offline.

It is understood that initial investigations have found no evidence that data has been removed.

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But affected service personnel will be alerted as a precaution and provided with specialist advice. They will be able to use a personal data protection service to check whether their information is being used or an attempt is being made to use it.

All salaries were paid at the last payday, with no issues expected at the next one at the end of this month, although there may be a slight delay in the payment of expenses in a small number of cases.

The Government will inform MPs of the breach when Parliament returns on Tuesday, with Defence Secretary Grant Shapps to make a Commons statement in the afternoon"setting out the multi-point plan to support and protect personnel”.

Cabinet minister Mel Stride said the Government takes cybersecurity “extremely seriously”.

He told Sky News, which first claimed China was behind the hack: “That is an assumption. We are not saying that at this precise moment.”

But Stride said the Government viewed Beijing’s government as an “epoch-defining challenge” and “our eyes are wide open when it comes to China”.

He confirmed the attack was on a third-party system rather than a MoD database but “nonetheless that’s still a very significant matter”.

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A spokesperson for the Chinese embassy in the UK said China opposes the accusations.

They said: “The so-called cyber attacks by China against the UK are completely fabricated and malicious slanders.

“We strongly oppose such accusations. China has always firmly fought all forms of cyber attacks according to law.

"“China does not encourage, support or condone cyberattacks. At the same time, we oppose the politicisation of cybersecurity issues and the baseless denigration of other countries without factual evidence."

The MoD has been working at speed to uncover the scale of the attack since it was discovered several days ago.

The revelation comes after the UK and the United States in March accused China of a global campaign of “malicious” cyber attacks in an unprecedented joint operation to reveal Beijing’s espionage.

Britain blamed Beijing for targeting the Electoral Commission watchdog in 2021 and for being behind a campaign of online “reconnaissance” aimed at the email accounts of MPs and peers.

Labour’s shadow defence secretary John Healey said: “So many serious questions for the Defence Secretary on this, especially from Forces personnel whose details were targeted.

“Any such hostile action is utterly unacceptable. Parliament will expect a full Commons statement tomorrow.”

In response to the Beijing-linked hacks on the Electoral Commission and 43 individuals, a front company, Wuhan Xiaoruizhi Science and Technology Company, and two people linked to the APT31 hacking group were sanctioned.

But some of the MPs targeted by the Chinese state said the response did not go far enough, urging the Government to toughen its stance on China by labelling it a “threat” to national security rather than an “epoch-defining challenge”.

Conservative former leader Iain Duncan Smith repeated those calls, telling Sky News: “This is yet another example of why the UK Government must admit that China poses a systemic threat to the UK and change the integrated review to reflect that.

“No more pretence, it is a malign actor, supporting Russia with money and military equipment, working with Iran and North Korea in a new axis of totalitarian states.”

The Metropolitan Police said it is not involved in any investigation at this stage.