When ten French soldiers were killed last year in an ambush by Afghan insurgents in what had seemed a relatively peaceful area, the French public were horrified.

Their revulsion increased with the news that many of the dead soldiers had been mutilated — and with the publication of photographs showing the militants triumphantly sporting their victims’ flak jackets and weapons. The French had been in charge of the Sarobi area, east of Kabul, for only a month, taking over from the Italians; it was one of the biggest single losses of life by Nato forces in Afghanistan.

What the grieving nation did not know was that in the months before the French soldiers arrived in mid-2008, the Italian secret service had been paying tens of thousands of dollars to Taleban commanders and local warlords to keep the area quiet, The Times has learnt. The clandestine payments, whose existence was hidden from the incoming French forces, were disclosed by Western military officials.

US intelligence officials were flabbergasted when they found out through intercepted telephone conversations that the Italians had also been buying off militants, notably in Herat province in the far west. In June 2008, several weeks before the ambush, the US Ambassador in Rome made a démarche, or diplomatic protest, to the Berlusconi Government over allegations concerning the tactic.

ROME (Reuters) - Italy's government denied a report on Thursday that it paid off Taliban commanders and Afghan warlords, potentially costing the lives of French troops who later took charge of the area unaware of the payments.

The Times said Italian secret service paid tens of thousand of dollars to insurgents to keep the Sarobi area east of Kabul quiet while Italian forces were stationed there. The report cited unidentified Western military officials.

Knowing nothing of the payments and carrying little ammunition in the belief they were in a benign area, French troops who took over the area in mid-2008 were surprised by an insurgent ambush that killed 10 soldiers, the report said.

Prime Minister Silvio Berlusconi's office denied the accusations, citing several attacks on Italian troops in the first half of 2008 as proof Italy had not paid off anyone.