The Chinese state has hacked the Ministry of Defence, Sky News understands.
MPs will be told on Tuesday of a massive data breach involving the MoD, targeting service personnel.
The government will not name the country involved, but Sky News understands this to be China.
The Chinese state is to be accused of two or three attempts at hacking MoD employees - including personnel.
The cyberattack was on a payroll system with current service personnel and some veterans. It is largely names and bank details that have been exposed.
All salaries will be paid this month.
The MoD hopes serving personnel will not be concerned about their safety. They will be provided with advice and support tomorrow
The contractor system is not connected to the main MoD computer systems and has been taken down with a review launched.
The MoD has been working at speed over the last 72 hours to understand the scale of the hack, after it was discovered in recent days.
It is understood investigations have not so far shown any data has been taken.
This could raise questions about whether other countries with challenging relationships with China will want to share sensitive intelligence with the UK.
This comes fewer than two months after China's "state-affiliated actors" have been blamed by the government for two "malicious" cyberattack campaigns in the UK.
Making a speech in the Commons, Deputy Prime Minister Oliver Dowden revealed the two incidents involved an attack on the Electoral Commission - responsible for overseeing elections and political finance - in 2021, and targeted attacks against China-sceptic MPs.
Luke de Pulford, the head of Inter-Parliamentary Alliance on China (IPAC), said the revelation needs to be a "turning point".
IPAC represents parliamentarians from democracies around the world, including Conservative MP Sir Iain Duncan Smith and Labour's Azfal Khan.
Mr de Pulford said: "This has to represent a turning point.
"These are actions suited to hybrid warfare, not the 'mutual respect' of which Beijing and London regularly boast.
"China under Xi Jinping is not a friend.
"Remove the blinkers. Our China strategy has failed. We need some realism fast."
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Tap hereXi Jinping, China's president, is currently on a tour of Europe - although he is not set to visit the UK.
He has spent today in Paris, and will travel with French President Emmanuel Macron to the Pyrenees tomorrow.
After that, he will visit Serbia on Wednesday and Hungary on Thursday - both countries which are on friendly terms with Beijing.
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