British lawmakers will now hold a formal inquiry into why prosecutors dropped the charges against two people accused of spying for Beijing, which has seen claims that the government in London deliberately intervened to scuttle the case.

In fast-moving, and often confusing, events, here is what we know so far about the saga, which has heaped pressure on Prime Minister Keir Starmer and raised questions about the Crown Prosecution Service (CPS).

- What's the latest? -

The head of MI5, Ken McCallum, said in a speech on Thursday that Beijing poses a threat "every day" and voiced frustration that the case had been abandoned.

"We've intervened operationally again just in the last week" against a "threat which connects back to China", he said.

Labour MP Matt Western told the House of Commons lower chamber on Thursday that parliament's committee on national security strategy, which he chairs, will launch an inquiry "as soon as we possibly can".

There are "a lot of questions yet to be asked", he said.

- What is the background? -

Christopher Cash, 30, and Christopher Berry, 33, were arrested in 2023, accused of collecting information which could be "directly or indirectly, useful to an enemy" between December 2021 and February 2023.

The arrests sparked concerns of a major security breach as Cash was revealed to be a parliamentary researcher reportedly enjoying close ties with senior lawmakers from the Conservative Party, which was in power in the UK at the time.

The men were charged under the Official Secrets Act in April 2024. Cash and Berry, a teacher, denied the accusations.

The men allegedly gave politically sensitive information to a Chinese intelligence agent for about a year.

Information included one MP being likely to withdraw from a Tory leadership race and another tipped for a Cabinet position in support for a certain foreign policy stance.

The charges were dropped last month, with Director of Public Prosecutions (DPP) Stephen Parkinson alleging the UK government had failed to provide evidence that Beijing was a security threat.

- What was the government's response? -

Starmer -- himself a former DPP -- has insisted the decision to drop the case was taken solely by the prosecution service, which acts independently of the government and police, and said he was "deeply disappointed".

The Conservatives have alleged that Starmer's National Security Adviser Jonathan Powell pushed for the case to be dropped over fears that China could pull much-needed investment from Britain.

Starmer vehemently denied this in parliament on Wednesday, calling the accusation "a red herring, a completely scurrilous allegation".

A few hours later, the government published three statements provided to the CPS over past months by Powell's deputy Matthew Collins.

One statement from Collins said Beijing conducts "large scale espionage operations against the UK to advance the Chinese state's interests and harm the interests and security of the UK".

They "threaten the UK's economic prosperity and resilience and the integrity of our democratic institutions," he added.

But he also acknowledged it was "important for me to emphasise" that the government "is committed to pursuing a positive relationship with China".

Beijing has firmly denied the spying charges, with a Chinese foreign ministry spokesperson saying: "We firmly oppose using so-called 'espionage activities' as an excuse to hype up, make issues, slander or smear."

- What is at stake? -

The controversy comes as Starmer tries to boost ties with the world's second-biggest economy and Britain's economic growth stagnates.

Under Starmer, Britain has struck post-Brexit trade agreements with the United States and India but not with its fifth-largest trading partner China.

Britain imported around pound67 billion ($90 billion, 77 billion euros) worth of Chinese goods last year, with some pound19 billion going the other way, according to UK official data.

It remains unknown exactly why prosecutors dropped the case and whether Starmer, who has been hit by political woes since his Labour Party won the July 2024 elections, could be in trouble.