Millions of pounds of taxpayers’ money could be ending up in the pockets of Taliban insurgents and corrupt Afghan officials, a damning report has revealed.

The International Crisis Group warned that up to 10 per cent of overseas aid was being paid in bribes and protection money to the Taliban and officials in Kabul.

Over the next four years, the Prime Minister has pledged to give £710million to Afghanistan alone. That could mean up to £70million of British money going to the very people we are fighting.

Taliban fighters: Contractors say their projects and staff may be attacked if they do not pay up

The Department for International Development spent £102 million on aid  to Afghanistan in the last financial year, but this will rise to £178 million this year. Of these totals, 16 per cent goes to Helmand province, where British troops operate.

The hard-hitting report found that despite billions being poured into  Afghanistan in aid, the country shows no signs of becoming ‘politically stable or economically viable’.

It also warned that there was ‘no possibility’ of the country becoming secure within the next three years, despite the efforts of Britain and other NATO countries.

The report will fuel criticism by some Tory MPs over David Cameron’s promise to increase UK spending on aid to 0.7 per cent of GDP at a time when other Whitehall departments are being hit with swingeing cuts.

Hostile: But anti-western forces often funnel off aid money through Afghanistan's political corruption

A total of £35billion has been given to Afghanistan by the international community since 2001.

The report by the ICG, which campaigns to prevent global conflicts, said: ‘After a decade of major security, development and humanitarian assistance, the international community has failed to achieve a politically stable and economically viable Afghanistan.

‘Despite billions of dollars in aid, state institutions remain fragile and unable to provide good governance, deliver basic services to the majority of the population or guarantee human safety.’

It went on to warn that aid delivery was being ‘undermined by corruption in Kabul and bribes paid to insurgent groups to ensure security for development projects’.

Taliban: £70million of British aid to Afghanistan is set to end up in the wrong hands

Taliban: £70million of British aid to Afghanistan will end up in the wrong hands

Contractors working on vital projects – such as building roads, hospitals and schools – have reported paying up to 10 per cent of the cost to the Taliban, otherwise they are prevented from finishing their work or ‘at worst’ had their projects and staff attacked. 

The ICG said: ‘Consequently,  taxpayers’ money fuels corruption networks.’

Previous reports have been highly critical of the West’s aid efforts, warning that Afghanistan is receiving more than it can spend. 

Meanwhile, as many as half of the country’s infrastructure projects have been estimated to end in failure. Mr Cameron’s controversial decision to increase spending on international aid dates back to his early attempts to modernize the party, but Conservative MPs are becoming increasingly vocal in their criticism.

Opposition: Defence Secretary Liam Fox is one of many MPs calling for the foreign aid budget to be cut

Defense Secretary Liam Fox is among those who have challenged the rise in a letter to Mr Cameron which was recently leaked to the media.

Tory MP Philip Davies said: ‘It is unjustifiable and unacceptable. 

‘It is bad enough that we are giving so much money away in overseas aid. But it is a further kick in the teeth to taxpayers when  they see it wasted and frittered away on corruption.

‘People cannot understand why, if we cannot afford to do things domestically, we can afford to spend millions of pounds on corruption and bribes to insurgents in Afghanistan and other countries. 

‘It is unjustifiable.’

International aid is one of only a handful of areas, including health spending in England, being ring-fenced from spending cuts over the next four years. Most other departments are seeing their budgets slashed.

Many countries, including the United Kingdom, have tried to bypass the Afghan government to deliver aid directly.

A spokesman for the Department of International Development insisted that the ICG’s report made no direct criticism of Britain’s aid effort to Afghanistan.

He said: ‘This is not about British aid. This report makes no claims whatsoever that British aid funding is being paid as Taliban protection. We have strict safeguards  in place to monitor exactly where our funding is going and protect against misuse.

‘British aid to Afghanistan builds roads, builds government capacity and gets young people into jobs as part of the British commitment to protect our own national security by helping Afghans take control of theirs.’

Tory MP Mark Pritchard defended the Government’s spending on aid. He said: ‘The Coalition has put in place new and robust measures to improve the accountability and transparency of international aid both in Afghanistan and different parts of the world.

‘But clearly there is much more that needs to be done to reduce mismanagement and corruption.’

Afghan President Karzai alleges U.S.-Taliban collusion

Afghan President Hamid Karzai on Sunday accused the Taliban and the United States of working in concert to convince Afghans that violence will worsen if most foreign troops leave — an allegation the top American commander in Afghanistan rejected as “categorically false.”

Mr. Karzai said two suicide bombings that killed 19 people on Saturday — one outside the Afghan Defense Ministry and the other near a police checkpoint in eastern Khost province — show the insurgent group is conducting attacks to help show that international forces will still be needed to keep the peace after their current combat mission ends in 2014.

Report: U.S. Bribes to Protect Convoys Are Funding Taliban Insurgents

The United States military is helping fund both sides of the war in Afghanistan, knowingly financing a mafia-like collection of warlords and some of the very insurgents American troops are battling, according to Afghan and American officials and a new Congressional study released today.

The military has turned to private trucking companies to transport the vast majority of materiel it needs to fight the war -- everything from bullets to Gatorade, gas to sandbags -- and in turn, the companies are using American money to pay, among others, the Taliban to try to guarantee the trucks' safe passage, the reports charge.

Trucking executives and investigators from the House Subcommittee on National Security say the United States military knew it was helping fund the people it was fighting but did nothing about it, choosing to satisfy short-term delivery requirements and ignore fears that payments to the enemy help perpetuate Afghanistan's long-term security problems.

The study's findings are reinforced by half a dozen interviews conducted in the last few months by ABC News with executives from trucking and security companies, both Afghan and American. Two American trucking executives, speaking on the condition of anonymity, say the payment structure goes beyond that depicted by the House report, detailing an intricate system whereby the American military is handing over billions of dollars to companies that bribe insurgents, warlords, road bandits and even corrupt Afghan police and soldiers to hold their fire as the trucks roll past dangerous stretches of highway.

In one case, a security company is paying a local commander who funnels American money directly to the Quetta Shura, the Taliban leadership council based in Pakistan, according to officials in Pakistan. The commander denied the allegation. On a recent day when the commander was told he had lost the security contract, a half dozen trucks were burned on the road between Kabul and Kandahar. The violence stopped a few days later when the contract was given back to him.

"These guys have the power to turn on the violence and turn it off," said one of the American trucking executives. "Our firm knowingly pays thieves to ensure the safety of our cargo."

"Basically it's a protection extortion racket," Rep. John Tierney (D-MA), who chairs the House subcommittee, said in an interview with ABC News. "Tony Soprano would be proud of it."

The House's 85-page report, titled "Warlord, Inc." was released as doubts about the war crescendo in Washington. Today Gen. Stanley McChrystal, the head of all foreign troops in Afghanistan, was called to the White House over a Rolling Stone article in which his aides get drunk and make fun of a handful of top Obama administration officials, and where he is quoted personally criticizing his civilian bosses.

And this week, the House will debate a supplemental to fund the war for another year, a bill that has revealed deep fissures in the Democratic Party over support for the war.

The report, along with a recent increase in violence, are so serious, the U.S. will have to determine whether to reconsider "the overall strategic approach to our mission in Afghanistan," reads the report's introduction.

The British army has been relocating Taliban insurgents from southern Afghanistan to the north by providing transportation means, diplomats say. 

The diplomats, who spoke on condition of anonymity, said insurgents are being airlifted from the southern province of Helmand to the north amid increasing violence in the northern parts of the country. 

The aircraft used for the transfer have been identified as British Chinook helicopters. 

The officials said Sultan Munadi, an Afghan interpreter who was kidnapped along with his employer, New York Times reporter Stephen Farrell, was killed by a "British sniper" as commandos executed a rescue operation to free Farrell. 

They said Munadi was targeted for possessing documents and pictures pointing at the British military's involvement in the transfer operation. 

The Afghan journalist also had evidence of the involvement of the foreign forces in Afghanistan in the tensions that rocked China's Xinjiang autonomous region in July, the diplomats said. 

American forces have also invigorated the insurgency in the war-ravaged country by outfitting the Taliban with Russian-made weaponry used during the 1979-89 Soviet invasion of Afghanistan, which was fought against by the Afghan Mujahedeen, the diplomats said. 

The US forces are assumed to have gathered the armaments during a campaign to "collect weapons from irresponsible people," after the 2001 invasion. 

Diplomats said Afghan Interior Minister Mohammad Hanif Atmar, a Pashtun who has received his higher education in the UK, was still operating under the British guidance. 

The Interior Ministry is accused of enabling the provision of arms and ammunition for the north-based militants by the Pashtun police force. 

Earlier in the week, Afghan President Hamid Karzai was quoted by the BBC Persian as having ordered an investigation into reports of 'unknown' army helicopters carrying gunmen to the north. 

The Afghan president said based on unconfirmed reports, the helicopters have been taking gunmen to Baghlan, Kunduz and Samangan provinces overnight for about five months now. 

In early 2008, Karzai expelled two British diplomats for allegedly planning to "turn" senior Taliban commanders. According to the Times Online, the British officials had sought to persuade militant chief Mullah Mansoor Dadullah to cooperate with the UK. 

Afghanistan is currently witnessing the highest level of violence since the invasion, despite the presence of more than 100,000 foreign troops.

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