Prime Minister Tony Blair has secretly agreed to allow Washington to station US missiles on British soil as part of President George W Bush's missile defence programme, the Independent on Sunday newspaper reported.
The paper said Blair's Downing Street office had given an "agreement in principle" to the US Defense Department that the weapons - so-called interceptor missiles - could be sited at a Royal Air Force base in Fylingdales, northern Britain.
A spokesman for the Ministry of Defence denied the reports, saying no approach had been made by the US government over the deployment of interceptors in Britain, and there was no deal.
"No agreement has been reached," he said.
Although the British government has said it will allow Washington to use early warning radar at the Fylingdales base for the missile defence programme, it has said nothing publicly about whether missiles would be sited there.
The Independent on Sunday report angered some left-wing members of Blair's Labour party, many of whom want their government to play no part in the US defence system.
"(This) is another example of how we appear to be in the pocket of America," Labour member of parliament Diane Abbott told BBC television. "We have no national interest in having American missiles on British soil."
The Independent on Sunday said the agreement was reached at a meeting between British and American officials in May but that London had asked that no formal request be made by Washington until after British elections, widely expected in May 2005.
Menzies Campbell, foreign affairs spokesman for the Liberal Democrats, Britain's third party, expressed concern that a decision may have been reached in secret.
"These reports, if true, are a source of grave concern given that a decision appears to have been taken behind closed doors before a full public debate on the costs and strategic implications," he told the newspaper.
"This could have major implications for the defence posture of the UK, our relations with Nato countries and other allies, and the strategic balance of nuclear weapons around the world."