The Chinese taxi-hailing app Didi has suspended plans to launch in Britain and continental Europe amid concerns about how it handles sensitive passenger data, The Telegraph can reveal.

Didi had secured licences to operate in several British cities as part of a push to challenge Uber, but is now understood to have pulled the plans for at least 12 months.

Staff working on the planned launches have been told that they face possible redundancy, while the company has stopped hiring in Britain.

The decision comes as Didi faces a crackdown by the Chinese government with its shares more than halving since its $68bn (£50bn) New York flotation in June. 

Beijing authorities have forced the company to remove its app from download stores and restricted its ability to sign up new users amid a cybersecurity probe triggered by concerns about user data leaving China. 

MPs had warned that allowing Didi to launch in the UK could mean personal and location data being transferred to China and potentially passed to the government due to Beijing’s national security laws that compel companies to obey such data requests.

The UK and Europe have stricter data protection laws than many countries, and it is believed the company wished to avoid questions about privacy that have led to multiple investigations into Chinese-owned TikTok.

Didi's headquarters in Hangzhou, China

Didi is China’s largest ride-hailing app and has been moving into South America, Australia and Africa as part of a global expansion. 

This year it secured operator licences in Manchester, Sheffield, Salford and Wolverhampton as part of an effort to challenge Uber directly in the UK, although it had never publicly announced plans.

The company no longer lists any open job adverts in Britain, and cuts in Europe are now expected in the next month, although some employees could continue with the company in other roles.

A Didi spokesman said: “We continue to explore additional new markets, liaising with relevant stakeholders in each and being thoughtful about when to introduce our services. As soon as we have news on additional new markets, we look forward to sharing it.

"We have established an international talent hub in the UK, recognising the exceptional quality of people in the market. Beyond that, any personnel matters remain strictly confidential. We seek to fully comply with all laws and regulations in all markets in which we operate."

A cross-party group of MPs had called for Didi’s launch in the UK to be closely monitored and asked for guarantees about where data would be stored and how it would be used.

The Information Commissioner’s Office said it had not received any complaints about the company and did not have any ongoing investigations.