Mr Gardiner received the donations from Lee, mainly to cover staffing costs in his office, over a period of six years, and employed her son as his diary manager.
The Labour MP said she appeared to be “operating as a legitimate person in the UK”.
He told Sky News: “From my point of view, that money was there to improve the work I was able to do in Parliament, and to improve the work I was able to do for my constituents – it paid for those researchers and it paid for them directly, none of it was for my personal benefit.”
He said he thought Lee would have regarded her donations to his office as a “very poor investment” as he had been “critical of the Chinese government on many occasions”.
In an earlier statement, Mr Gardiner, who was a member of the shadow cabinet under former Labour leader Jeremy Corbyn said he had been liaising with the security services for a number of years about his contacts with Lee, who runs a law firm in central London.
He told Sky News he only found out she was a “spy” who was engaged in “illegal activity” when approached by security officials on Thursday.
“The first I knew about Christine Lee being a spy was this morning when I had a meeting with the director of parliamentary security and two Security Service agents, and they made me aware that they now had information which showed that Christine Lee had been engaged in illegal activity,” he said.
“But I had been cautious because I knew she was a solicitor who acted for a number of a Chinese businesses in the UK over a very long period of time, and for that reason I had spoken openly and frankly with our security services for a number of years about the engagement that I had with her.
“And I made sure that at no time did they suggest in any way that I should cut off engagement with her.”
Asked when he last had a conversation with Lee, he said: “Earlier this week.”
“What we spoke about earlier this week was actually the situation of my parents-in-law, who are elderly and ill,” he said.
“She had expressed concern as to their wellbeing, and that’s what we spoke about.”
Mr Gardiner said he asked Lee’s son to offer his resignation as soon as he received the security warning on Thursday.
“This morning they made it clear that she had been trying to insinuate and influence across all political parties here in Parliament and that they believed she had been doing this illegally,” he said.
“As soon as I heard that, as soon as I finished the meeting with the director of security, I then went and immediately contacted her son who has worked in my office as the diary manager and asked him to tender his resignation forthwith, which he did.
“But I want to stress to you that the security services said to me that they had no information that led them to believe that he was aware of his mother’s illegal activity.”
Mr Gardiner said he was “deeply distressed” to find out about Lee’s activities.
“Of course I feel very angry about it, and I feel deeply distressed that they should have targeted me in that way, as indeed they targeted many other people,” he said.
“But don’t forget, this was a company which received an award from No 10, Christine Lee received an award from No 10 for the good work she was doing within the community in Britain, so to all intents and purposes I believed that they had a green light to operate.
“Nonetheless I was cautious, and I made sure to clear everything I did with the security services.”
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