The Italian government and NATO officials are denying reports Italy paid off the Taliban to keep the peace in parts of Afghanistan patrolled by Italian troops.

The office of Italian Premier Silvio Berlusconi said Thursday that the report was "completely groundless."

U.S. Col. Wayne Shanks, a NATO spokesman in Afghanistan, denied that the group pays insurgents.

"We don't do bribes," Shanks said in Kabul. "The article has unnamed sources, innuendo and hyperbole. We see no evidence of any of the accusations."

The original report, from the Times of London, cited high-ranking NATO officers, who spoke on condition of anonymity, saying the Italians paid thousands of dollars to the Taliban and warlords in the Surobi district, east of Kabul.

The Times report said the Italians did not disclose the payoffs to French forces, who took over from them in Surobi in the middle of 2008.

Apparently led to believe Surobi was a safe region, French forces were ambushed not long after they took control. Ten French soldiers died in a mountain pass attack, shocking the French public.

"The Berlusconi government has never authorized nor has it allowed any form of payment toward members of the Taliban insurgence," the statement from the Italian premier's office said.

The Italian government noted the country lost one soldier in Surobi in February 2008 and suffered several attacks.

Italian Defence Minister Ignazio La Russa called the Times report "offensive to the deaths we have suffered in Afghanistan, to our injured ones and to the daily level of commitment of our soldiers."

Italy has about 2,800 soldiers in Herat and Kabul, and has suffered 21 deaths in Afghanistan.

Military commanders in Afghanistan often compensate Afghans for civilian losses. Shanks said funds are available for development work in consultation with local leaders or for compensation for damages.

With files from The Associated Press