BBC has reported this morning that an alert from the security service said Christine Ching Kui Lee "established links" for the Chinese Communist Party (CCP) with current and aspiring MPs.
She then gave donations to politicians, with funding coming from foreign nationals in China and Hong Kong.
It comes after a "significant, long-running" investigation by MI5, Whitehall sources told the BBC.
One of the MPs funded by Ms Lee was Labour's Barry Gardiner, who received over £420,000 from her in five years - but he said he had always made the security services aware of the donations.
Liberal Democrat leader Sir Ed Davey also received a £5,000 donation when he was energy secretary - but he said the money was accepted by his local association and it was "the first time he has been given cause to be concerned".
Home Secretary Priti Patel said it was "deeply concerning" that someone "who has knowingly engaged in political interference activities on behalf of the Chinese Communist Party has targeted parliamentarians".
But she said the UK has measures in place "to identify foreign interference".
The security service said anyone contacted by Ms Lee should be "mindful of her affiliation" and its "remit to advance the CCP's agenda".
Image: Clutching her handbag and grinning as she poses for a picture alongside then Labour leader Jeremy Corbyn in 2016, Christine Ching Kui Lee cuts an unassuming figure. Social Media