Christopher Berry and Christopher CashJACK TAYLOR AND BELINDA JIAO FOR THE TIMES

"This is the national security of the United Kingdom," Tugendhat told MPs. "We have two individuals seeking to extract information from us and the government's response is not to do everything you can to make sure the prosecution works. But no, no, process, process.

"Well, who the hell's side are you on? This isn't about the bureaucracy. This is about leadership. We're not sent here to be civil servants. We're sent here to lead the country and to make decisions."

He later added: "Given that the government's position is that the bureaucrats run the government, the bureaucrats are in charge of everything, may we dissolve this House and save the taxpayer the money?"

Tugendhat, who employed Cash in parliament as part of his work for the Chinese research group, was speaking during a Commons debate following the release on Wednesday night of government evidence in the case.

However, ministers denied having allowed the case to collapse, saying that it was clear that the government had taken "significant strides" to meet the evidence threshold needed by prosecutors to take the case to court.

Chris Ward, the Cabinet Office minister, said: "It's clear from this evidence, which all can now see, that the DNSA [deputy national security adviser Matthew Collins] took significant strides to articulate the threat from China in support of the prosecution. The decision to proceed, as the prime minister made it clear yesterday, was taken purely by the CPS.

"It is also clear that three segments are constrained by the position of the Conservative government on China at the time of the alleged offences."

Ward later added: "This government's first priority will always be national security and keeping this country safe. We wanted this case to proceed." He said it was not ministers' place to "be vetting or interfering in evidence".

The shadow minister Neil O'Brien said the government had not explained why it had failed to provide the level of evidence that China was a threat to national security, which had been asked for by the CPS.

"We now know that the CPS were not far short of what they needed. The [director of public prosecutions] told MPs yesterday it was something like 5 per cent short. We don't know exactly what the CPS was asking for.

"We don't know why the government would not go a bit further when it was asked to, and that is what we need to hear from the minister today."

He added: "The witness statements are shocking. They tell us China is conducting 'large-scale espionage operations'." He said the evidence published on Wednesday night included lines from Labour's manifesto, which "weakened" the case.

He added: "This House needs to know what was asked for by the CPS, why it was refused and we must see all the correspondence and the minutes, if they won't publish the China files, people will ask, what has this government got to hide?"

Matt Western, chairman of the joint committee on the national security strategy, said there were "a lot of questions yet to be asked" and announced they would hold a "formal inquiry into the issue".

Western said: "We will be holding this inquiry as soon as we possibly can." He called on the government to give the committee access to ministers and civil servants to provide evidence.