The UK government is to strengthen Britain’s takeover regime to protect companies that raise national security issues.

Currently the government can only intervene in takeovers of companies with a turnover of £70m or more. That figure is set to be cut to £1m so that much smaller companies can be protected.

The government will also remove a requirement that an intervention be triggered by the potential for a takeover to increase the UK market share of a company by 25%.

Business secretary Greg Clark said: “Britain has, and always has had, a proud record of being open to the world as the foremost advocate of free trade.

“It is right that every so often the government reviews its mergers regime to close loopholes where they arise and this is what these proposals do in the area of national security.

“No part of the economy is off-limits to foreign investment and the UK will continue to be a vociferous advocate for free trade and a magnet for global talent.”

The government has now launched a consultation looking to apply the new rules to businesses that manufacture or design items that are subject to export controls, and companies that are involved in the design of computer chips and quantum technology.