­USA based Cisco Systems is reported to have terminated a long standing reseller agreement with China's ZTE following allegations that ZTE resold Cisco equipment to Iran, in violation of US laws.

Cisco carried out an investigation into the allegations which emerged earlier this year, and were at the time denied by ZTE, and the Reuters news agency has now reported that Cisco has decided to terminate the reseller agreement.

David Dai Shu, a ZTE spokesman, said of Cisco's decision to cut ties: "ZTE is highly concerned with the matter and is communicating with Cisco. At the same time, ZTE is actively cooperating with the U.S. government about the probe to Iran. We believe it will be properly addressed."

ZTE is still not commenting on the veracity of the allegations, although it has subsequently said that it is curtailing its operations in the country anyway. ZTE had also been accused of discussing the destruction of documents that proved the company had shipped embargoed US computer goods to the country.

Cisco had been reducing its cooperation with ZTE over recent years, and the company had been reduced from a technology partner to just a reseller in 2010.

The timing of the news comes at a bad time for ZTE, as the USA's House Intelligence Committee is expected to release a criticial report later today into the company's links with the Chinese government.