Members of the Foreign Affairs Committee were declined visas to visit Hong Kong later this month by Chinese authorities who accused the former colonial power of seeking to interfere in pro-democracy protests.
While Prime Minister David Cameron's government says the situation can be smoothed over with talks, it has caused outrage among lawmakers who want ministers to take a firmer stance.
The refusal complicates British efforts to reset relations with China that were plunged into difficulties after Cameron met the Dalai Lama at Downing Street in 2012.
"We have an indispensable relationship with China," he told the Commons. "It's important that this relationship is based on mutual understanding and respect."
Cameron's official spokesman also downplayed fears that the ban could affect trade between Britain and China. British exports to China were worth an average 1 billion pounds (1.2 billion euros, USD 1.5 billion) a month in 2013.
"Where we have differences... We discuss those types of issues alongside and as part of the full range of bilateral relations," he said.
Andrew Rosindell, a member of Cameron's Conservative party, urged that the Chinese ambassador be summoned to the Foreign Office to explain what had happened.
He described the visa ban as "shameful" and "nothing short of an outrage".
"Britain has to decide whether we tolerate and simply accept China's behaviour... Or whether we're prepared to reconsider" the nature of the relationship, Rosindell added.
Another Conservative, John Stanley, said he was "very disappointed" that the British foreign ministry had not made a stronger protest, while senior Labour lawmaker Keith Vaz insisted on the need for a "very clear response" from the ministry.
The original founders of the Occupy movement today said they were set to "surrender" but it is thought unlikely that the students who make up the bulk of the protestors will listen to their call for a retreat.
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