Both Beijing and the company deny the charge.
It said in a statement that the decision was made "as part of network architecture principles in place since 2006".
"We're applying these same principles to our current RFP (request for proposal) for 5G core infrastructure," the British group added.
"As a result, Huawei has not been included in vendor selection for our 5G core."
The push is forcing companies and governments to finely balance their positions because of the enormous political and economic influence of both Washington and Beijing.
New Zealand's government last week insisted that it was not banning Huawei from its 5G network rollout because it was Chinese.
"It's not about the country, it's not even particularly about the company, it's about the technology that is proposed," New Zealand's intelligence agency minister Andrew Little said.
BT likewise stressed that "Huawei remains an important equipment.provider outside the core network and a valued innovation partner." The Wall Street Journal said the UK government is currently reviewing the makeup of its telecommunications equipment market.
Britain's MI6 head Alex Younger publicly questioned on Monday whether Huawei should be involved in the 5G platform.
"We need to decide the extent to which we are going to be comfortable with Chinese ownership of these technologies and these platforms in an environment where some of our allies have taken a very definite position," he said in a rare public address.
Beijing could "force Chinese suppliers or manufacturers to modify products to perform below expectations or fail, facilitate state or corporate espionage, or otherwise compromise the confidentiality, integrity, or availability," Younger said.
BT used to be known as British Telecom -- the government-run provider of fixed-line services in the United Kingdom.
It changed its name and was privatised between 1991 and 1993. BT reports offering various services in around 180 countries.
(With inputs from agencies.)