Budapest - NATO defence ministers agreed Friday to target drugs traffickers and opium laboratories in Afghanistan as part of the alliance's efforts to undermine the Taliban insurgency.

But under a compromise hammered out in Budapest, member states participating in NATO's International Security Assistance Force (ISAF) in Afghanistan will be free to opt in or out of any anti-narcotics operations.

NATO Secretary General Jaap de Hoop Scheffer said ministers had agreed that the "ISAF can, in concert with Afghan authorities, act against facilities or facilitators supporting the insurgency."

However, any action would be "subject to the authorization of specific nations," the NATO chief said.

That was a concession to countries like Germany, Spain and Italy, who argue that the fight against drugs should be left to the Afghan police. These countries had also expressed concern that any NATO raids on laboratories would kill civilians and undermine the alliance's popularity among ordinary Afghans.

In an effort to address such reservations, ministers also agreed to ensure that civilian casualties be minimized, and that the anti-narcotics fight be conducted mainly in the southern provinces of Afghanistan, where cultivations and the insurgency both thrive.

German Defence Minister Franz-Josef Jung said he was "very satisfied with the compromise".

Jung said the deal would allow German soldiers to "continue to support the training of the Afghan security forces" and to limit its role to providing assistance to Afghan-led operations through logistical, intelligence and medical support.

NATO officials said the plan was "consistent with the appropriate UN Security Council resolutions" and with the ISAF's existing operational plan. Friday's compromise would be reviewed in February, when defence ministers next meet in Poland.

The deal clinched in Budapest follows a specific request from Afghan Defence Minister Abdel Rahim Wardak, who on Thursday had asked his NATO colleagues to help his government target drugs laboratories and seize imports of the chemicals that are needed to turn opium into heroin.

"We have asked NATO to support our efforts to destroy the laboratories and to interdict the chemical precursors which are coming from outside the country," Wardak said.

NATO military commanders acknowledge that more needs to be done to fight the opium and heroin trade. US Defence Secretary Robert Gates believes that the Taliban pocket between 60 and 80 million dollars per year from the sale of drugs.

"It is not only corrosive to good governance, it also directly funds the people that are killing Afghans, Americans and all our coalition partners," Gates said in Budapest on Thursday.

Poppy cultivations have fallen by 19 per cent since last year, but Afghan heroin still accounts for more than 90 per cent of the heroin circulating in Europe.