China has secretly fired powerful laser weapons designed to disable American spy satellites by "blinding" their sensitive surveillance devices, it was reported yesterday.

The hitherto unreported attacks have been kept secret by the Bush administration for fear that it would damage attempts to co-opt China in diplomatic offensives against North Korea and Iran.

Sources told the military affairs publication Defense News that there had been a fierce internal battle within Washington over whether to make the attacks public. In the end, the Pentagon's annual assessment of the growing Chinese military build-up barely mentioned the threat.

"After a contentious debate, the White House directed the Pentagon to limit its concern to one line," Defense News said.

The document said that China could blind American satellites with a ground-based laser firing a beam of light to prevent spy photography as they pass over China.

According to senior American officials: "China not only has the capability, but has exercised it." American satellites like the giant Keyhole craft have come under attack "several times" in recent years.

Although the Chinese tests do not aim to destroy American satellites, the laser attacks could make them useless over Chinese territory.

The American military has been so alarmed by the Chinese activity that it has begun test attacks against its own satellites to determine the severity of the threat.

Satellites are especially vulnerable to attack because they have predetermined orbits, allowing an enemy to know where they will appear.

"The Chinese are very strategically minded and are extremely active in this arena. They really believe all the stuff written in the 1980s about the high frontier," said one senior former Pentagon official.

There has been increasing alarm in parts of the American military establishment over China's growing military ambitions.

Military experts have already noted that Chinese military expenditure is increasingly designed to challenge American military pre-eminence by investing in weaponry that can attack key systems such as aircraft carriers and satellites.

At the same time, China is engaged in a large-scale espionage effort against American high-tech firms working on projects such as the multibillion-pound DD(X) destroyer programme.

Several spy rings have been cracked and the FBI is increasing the number of counter-intelligence staff tracking the Chinese effort.