Australia has moved to formally block the sale of its biggest energy grid to Chinese investors over security concerns.
The sale was put on hold last week, and now the deal has been officially nixed by Australian treasurer Scott Morrison.
Two Chinese firms had been in talks to buy a 50.4 per cent stake in Ausgrid.
However, in a statement announcing the decision, Morrison said the sale would be “contrary to the national interest”.
"This is consistent with the recommendation from the Foreign Investment Review Board," Morrison said.
After Australia paused talks last week, China warned the Canberra government against being protectionist, and said it would impact “the willingness of Chinese companies to invest in Australia.”
It comes as the UK government continues to review the construction of two nuclear power reactors at Hinkley Point, which would be financed by a combination of French and Chinese money.
EDF approved the plans at a board meeting last month, but business and energy secretary Greg Clark unexpectedly put the deal on hold, with a decision now expected next month.
This caused the Chinese to warn that relations between the UK and China were approaching "a critical juncture"