ISLAMABAD, Pakistan - Pakistan's powerful intelligence agency not only funds and trains Taliban insurgents fighting U.S. and NATO troops in Afghanistan, but is also represented on the insurgency's leadership council, a report issued by the London School of Economics alleges.

Assertions that Pakistan's Inter-Services Intelligence nurtures links with the Afghan Taliban are not new. But the scope of the relationship that the report's author, Matt Waldman, claims is startling.

The new accusations could prove damaging to the fragile alliance Washington is trying to foster with Pakistan, its military establishment, and its weak civilian government led by President Asif Ali Zardari.

Waldman, a fellow at the Kennedy School of Government at Harvard University, based his assertions on interviews with nine Afghan Taliban commanders as well as with Afghan and Western security officials.

The report says it is official Pakistani policy to support the Taliban insurgency in Afghanistan, and that the ISI has a strong voice on the Quetta Shura, the Afghan Taliban leadership council, named after the southern Pakistani city that is believed to serve as the council's haven.

The report asserts that, based on the interviews, "the ISI has representatives on the Shura, either as participants or observers, and the agency is thus involved at the highest level of the movement."

The report also alleges that Zardari, long regarded as a close ally of the Obama administration in the war on terror, has met with captured senior Taliban leaders in Pakistan and has vowed to ensure their release as well as to support their efforts in Afghanistan.

The claims drew vehement denials from Islamabad.

"I consider this a highly speculative and provocative report," Pakistani military spokesman Maj. Gen. Athar Abbas said. "I question the authenticity and credibility of this so-called research. . . . It's not worthy of any response."

Although Islamabad insists it does not support Taliban insurgents battling Afghan President Hamid Karzai's government and Western troops, U.S. diplomats and military commanders have long suspected that Pakistani officials, particularly its intelligence community, have never severed ties with the Afghan Taliban.

Many observers maintain that Pakistan supports the Afghan Taliban behind the scenes as a way of countering attempts by its nuclear archrival, India, to expand influence within Afghanistan.

Earlier this year, Pakistan arrested several high-ranking Taliban leaders who had sought refuge in Karachi and other Pakistani cities, including the insurgency's second-in-command, Mullah Abdul Ghani Baradar.

However, analysts said the arrests, which the United States welcomed, may have been aimed at ensuring Pakistan's seat at the negotiating table whenever the West, Karzai, and the Taliban begin peace talks.

Pakistan's calibrated approach toward dealing with the Taliban is especially evident in the country's largely lawless tribal areas along the Afghan border.

There, those Taliban who have made Pakistani security installations and civilians their targets are aggressively pursued by the military, but insurgents who focus on Afghanistan, such as the Haqqani network in North Waziristan, are left alone.

Appearing on al-Jazeera television, Waldman defended his research, saying that in addition to speaking to Afghan Taliban field commanders, he had spoken to officials from Western governments who concurred with his findings.