A Russian-owned firm was hired to carry out key works in the £2.6million renovation of No 9 in an undisclosed contract to get it ready for White House-style television briefings.
An inside source told HuffPost UK that Megahertz undertook essential work, including the installation of computers, cameras, microphones and a control desk to get the building ready.
In 2013, Megahertz was bought by the UK arm of Okno-TV – a Moscow-based firm that has carried out technical work for state-controlled broadcasters Russia Today, Channel One, and Public Television of Russia.
Most of Megahertz’s current shareholders are either current or former workers at the Russian firm, according to Companies House.
It has not been suggested that either Megahertz or Okno-TV is under the influence of the Russian government, which is set to be described as a “hostile state” in a landmark foreign policy review this week.
Labour said there were “series questions” to be answered about the refurb, while the chair of Westminster’s cross-party group on Russia said it sounded “dodgy”.
An industry source added: “They are Russian-owned and the owners supply the Russian state broadcaster, and they have just put all the technology into Downing Street.”
Chris Bryant MP, who chairs the all-party parliamentary group on Russia, said: “This new vanity project sounds dodgy.
“All the details should be published immediately but what shocks me most is that the Johnson government seems to have learnt nothing about the involvement in sensitive UK projects of companies with [links] to autocratic regimes, whether in Russia or in China.”
Shadow cabinet office minister Fleur Anderson said: “This gets to the heart of this government’s deeply flawed obsessions with layer upon layer of wasteful outsourcing – pretty soon, they don’t appear to know or care about where British taxpayer money is going or who it is funding.
“The fact the government seems to have simply brushed this off with no further transparency or assurances on due diligence is deeply concerning.”
The industry source told HuffPost UK that the firm had carried out systems integration work and was subcontracted by Interserve – which holds Cabinet Office facilities management contracts.
The source also said the government could have hired a British firm and paid hundreds of thousands, rather than millions, of pounds.
“It could have been a couple of hundred grand,” they said. “As far as I can see there has been no competition.”
They went on: “Doing this kind of work is a skillset that exists in the UK. It is something that we are good at doing.
“There are technical experts in building broadcast systems all over this country and none of us were involved.
“Megahertz have been in the UK market for years but they got bought out by the Russians.
“They have been involved in UK television for years. They are a perfectly good and respectable systems integration company – they know what they are doing.
“But they are Russian-owned and the owners supply the Russian state broadcaster, and they have just put all the technology into Downing Street.”
A government spokesperson said: “We take all necessary measures to ensure the very high standards of security that we have in place across the government estate are always met.
“All procurement decisions and contractual awards are made in line with strict government guidelines to ensure value for money for the taxpayer.”
Megahertz was asked whether there was a competitive process for the contract, how much the firm was paid for the work, and whether it could respond to concerns about security. The company declined to comment.