From the AP: Italy and NATO on Thursday denied a newspaper report that the Italian intelligence secretly paid the Taliban thousands of dollars to maintain peace in an area in Afghanistan that was under Italian control.

Premier Silvio Berlusconi’s office called the report in the Times of London “completely groundless.” The Italian defense minister denounced it as “rubbish” and said he wanted to sue the newspaper.

In Kabul, a U.S. spokesman for NATO forces in Afghanistan denied the allegations. “We don’t do bribes,” Col. Wayne Shanks said. “We don’t pay the insurgents.”

The Times reported that Italy had paid “tens of thousands of dollars” to Taliban commanders and warlords in the Surobi district, east of the capital, Kabul. The newspaper cited Western military officials, including high-ranking officers at NATO, speaking on condition of anonymity.

It accused Rome of failing to inform its allies about the payments and of misleading the French, who took over the Surobi district in mid-2008, into thinking the area was quiet and safe. Shortly afterward, French troops were hit with an ambush that killed 10 soldiers and had big political repercussions back in Paris.” (photo: Times/UK)

Update: Silvio Berlusconi attempts to duck Afghanistan bribe scandal.