The former director of strategy for David Cameron has hit out at the Prime Minister's welcome for visiting Chinese president Xi Jinping, calling it "one of the worst national humiliations" since Britain begged for money from the International Monetary Fund in the 1970s.
In an interview on BBC Newsnight on Tuesday, Steve Hilton slammed the banquets and processions being held for China's leader on his state visit, saying the country was a "rogue state" and that he didn't understand "why we are sucking up to them".
He said we should impose sanctions on China, rather than "rolling out the red carpet".
Hilton, who advised Cameron until 2012 and now runs political data company CrowdPac, compared the embarrassment of China's visit to when Prime Minster James Callaghan was forced to ask the International Monetary Fund for a £2.3 billion rescue package in the 1970s, the largest ever bailout request at the time.
"Honestly, I think this is one of the worst national humiliations we've seen since we went cap-in-hand to the IMF in the 1970s," Hilton said.
He argued that trying to do £30 billion in trade and investment deals with China was not worth the compromises the UK would have to make over human rights and cyberspying, and ultimately "bad economics".
"Forget about the terrible things that the Chinese regime is doing at home, the vicious political oppression and the violent physical abuse of women," he told Newsnight host Evan Davis.
"Just look at what they are doing internationally: militarily threatening their neighbours, empire building in Africa, and on a daily business stealing property from businesses and governments all around the world trough their relentless cyber attacks. I mean the truth is that China is a rogue state, just as bad as Russia or Iran, and I just don't understand why we are sucking up to them, rather than standing up to them as we should be."
"Maybe it's because we have a living to earn?" asked host Davis.
"I think that is such as false choice," Hilton replied. "The argument is that this is some sort of choice between squishy human rights and hard-nosed economics - it's simply not true. The idea that the only way we can make a living and create jobs at home is to engage with such a regime as this is completely false."
Hilton was satirised in the BBC comedy The Thick of It as spin doctor Stewart Pearson, and came up with the iconic for 'New Labour, New Danger' poster for the Conservatives in 1996, showing Tony Blair with demonic eyes.
Hilton argued that Britain should consider sanctions on China, and instead build its relationship with India. He said he had long argued this point with Cameron and Chancellor George Osborne when he worked with them, saying, "They know exactly how I feel about this, so none of this should be a surprise to them" but also noting that he "lost many arguments in Downing Street".
"Why aren't we rolling out the red carpet for India: a country where there is more opportunity and we don't have to make the kind of comprises involved in dealing with China?" he said.
"There's a further point which is what's in the interests of our economy long-term is a globalised, open world economy, run according to the values that we share, and the Chinese regime completely rejects. So the more that we give in to their way of doing things, the worse it gets for us in the long-term economically, never mind of the moral and human rights questions, this is actually bad economics."
Davis then challenged Hilton on what he would actually suggest David Cameron say at a dinner this week with the Chinese President.
"The first thing if to not to do the kinds of things we're doing to day, to really signal clearly that we have a different priority," Hilton said.
"We have to be much tougher," he added, saying Britain should consider imposing sanctions on China, just as the USA had done on Xi's recent visit. "That was the agenda with President Obama and his meeting with the Chinese President," Hilton said.