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Italy Denies Report It Paid Off Taliban, Warlords

ROME (Reuters) -- Italy's government has denied a report 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.

Britain's "Times" newspaper 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 incorrect 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.

"The Berlusconi government has never authorized or allowed any form of payment of sums of money in favor of members of the insurgent Taliban in Afghanistan, and is not aware of similar initiatives by the previous government," it said in a statement.

Defense Minister Ignazio La Russa called the report "garbage" and "offensive" and said he had ordered staff to prepare a lawsuit against the "Times."

Italy also denied the "Times" report that the U.S. ambassador had submitted a formal complaint after discovering through intercepted phone conversations that Italians had been buying off militants in the far-west Herat Province.

A U.S. Embassy spokeswoman in Rome said the embassy does not comment "on internal diplomatic conversations that may or may not have occurred."

The newspaper cited a high-ranking Western intelligence source as calling the Italian behavior an "utter disgrace" and that the "Italians have a hell of a lot to answer for."