The UK government has given its conditional approval for Chinese technology company Hytera to buy the British communications firm Sepura for 74 million pounds.

The acquisition still needs approval from the German federal minister of economic affairs but Sepura shares rallied when the news was revealed.

Hytera, the Shenzen-based manufacturer of radio systems, bid for Sepura, a similar company, in December, but the acquisition was stalled when United Kingdom and German authorities withheld their approval. Sepura supplies the UK's Metropolitan Police and the German army with radios. Regulators were concerned about a Chinese acquisition on "national security grounds".

The UK Department of Business appears to have had its concerns answered. A spokeswoman said: "Having considered the Competition and Market Authority's report on the proposed takeover of Sepura, the secretary of state is minded to accept the remedies offered by Sepura and Hytera in order to ensure the UK's national security is properly protected."

Sepura was brought out of administration by Goldman Sachs' former Europe boss Michael Sherwood in 2002 for just 1 pound. The company was floated on the London Stock Exchange five years later with a valuation of 200 million pounds.

Sepura began life as Pye in 1896 in Cambridge, where the company is still headquartered. The company was an early pioneer of television in the 1930s, but later specialized in radio.

If the acquisition is cleared, Hytera will pay Sepura shareholders 20 pence per share. Sepura shares were trading at 13.75 pence at noon on Thursday.