Leaked reports of an internal investigation suggest the Chinese military has been blamed for a hack into a computer network belonging to the Pentagon.
The Financial Times, citing unnamed current and former US officials, said the hack of US Department of Defense systems took place in June.
While the Pentagon declined to say who was behind the hacking, which led to the shutdown of a computer system serving the office of Defense Secretary Robert Gates, officials told the FT newspaper that it was China's People's Liberation Army.
"The PLA has demonstrated the ability to conduct attacks that disable our system," the newspaper quoted a former US official as saying. One senior US official reportedly said the Pentagon had pinpointed the exact origin of the attack.
The paper quoted another person familiar with the event as saying there was a "very high level of confidence... trending towards total certainty" that the PLA was responsible.
The paper said both the US and Chinese militaries were widely assumed to conduct computer espionage on each other, however the June hack has raised concerns to a new level "because of fears that China had shown it could disrupt systems at critical times".
However, the Chinese are vigorously denying the claim, dismissing it as a product of "Cold War" thinking.
"The Chinese government has consistently opposed and vigorously attacked according to the law all internet-wrecking crimes, including hacking," said Chinese Foreign Ministry spokeswoman Jiang Yu at a regular news briefing on Tuesday.
"Some people are making wild accusations against China ... These are totally groundless and also reflect a Cold War mentality."
Last week, Chinese hackers were accused of infiltrating German government computers. Angela Merkel, the German chancellor, apparently raised the issue with China's premier, Wen Jiabao, in a visit to Beijing. The Der Spiegel newspaper claimed that the hackers had been traced to Guangzhou and Lanzhou, which are both centres of operation for the People's Liberation Army.
There seems to be little doubt that the PLA probes US networks, just as the US does the same to Chinese systems. And it is not just foreign governments that the Pentagon has to worry about.
Back in July, Gary McKinnon, the ex-systems administrator accused of conducting the biggest military hack of all time, won the right to have his case against extradition to the US heard by the House of Lords.
McKinnon, accused of causing $961,000 worth of damage to computers by hacking into systems belonging to the Pentagon, NASA and the US military from his home in North London, could face a life sentence in jail with no chance of repatriation if he is extradited to the US.