China denied involvement in internet attacks and defended its online restrictions as lawful Monday after the United States urged Beijing to investigate a computer attack against search engine giant Google.

The company announced on Jan. 12 that it would pull out of China unless the government relaxes its rules on censorship. The ultimatum came after Google said email accounts of human rights activists critical of China had been hacked.

Since then, U.S. Secretary of State Hillary Rodham Clinton has criticized the censorship of cyberspace, drawing a strong counterattack from Beijing. The Foreign Ministry on Friday said her remarks damaged bilateral relations, while a Chinese state newspaper said Washington was imposing "information imperialism" on China.

The increasingly heated environment is likely to pose challenges to negotiating an arrangement that would suit both Google's and China's interests.

The company says it remains optimistic it can persuade China's ruling party to loosen restrictions on free expression on the internet, so it can keep doing business in the country. However, China's government has given little indication it's willing to budge.

"Increasingly, the line emerging from the Chinese government is harder and less open to compromise," said Russell Leigh Moses, an analyst of Chinese politics based in Beijing. "Hillary Clinton's speech was seen by many officials here as the United States' laying down a marker and put matters in a more confrontational mode."

Accusation 'groundless'

On Monday, China was on the defensive again.

The Ministry of Industry and Information Technology said the country's anti-hacking policy is transparent and consistent.

"Any accusation that the Chinese government participated in cyberattacks, either in an explicit or indirect way, is groundless and aims to discredit China," an unidentified ministry spokesman said, according to a transcript of an interview with the official Xinhua News Agency posted on the ministry's website.

The Communist Party's official People's Daily newspaper, meanwhile, accused the U.S. government of strictly controlling the internet at home while urging other countries to build an "internet freedom utopia.

"In reality, this 'internet freedom' that it is marketing everywhere is nothing but a diplomatic strategy, and only an illusion of freedom," the paper said.

Xinhua also cited the State Council, China's cabinet, as criticizing what it called interference in the country's domestic affairs.

Content heavily censored

Internet control is considered a critical matter of state security in China.

Beijing promotes internet use for commerce, but heavily censors content it deems pornographic, anti-social or politically subversive and blocks many foreign news and social media sites, including Twitter and Facebook, and the popular video-sharing site YouTube.

Google said it had uncovered a computer attack that tried to plunder its software coding and the Gmail accounts of human rights activists protesting Chinese policies. The company traced the attacks on its computers to hackers in China, but hasn't directly tied them to the Chinese government or its agents.

A Chinese internet security official questioned the allegation, saying Google had not reported its complaints to China's National Computer Network Emergency Response Technical Team.

"We have been hoping that Google will contact us so that we could have details on this issue and provide them help if necessary," Zhou Yonglin, the team's deputy chief of operations, said in an interview with Xinhua posted on the team's website.

Zhou said the team logged attacks on 262,000 Chinese computers last year by hackers implanting malicious software such as Trojans, which can allow outside access to the target's computer. More than 16 per cent of the attacks came from computers located in the U.S., he said.