Australia admitted Friday flying in Afghan fighters to train with elite special forces troops in a controversial strategy to tackle Taliban insurgents in the drawn-out conflict.

The defence department said the Afghans were members of a police unit from the southern province of Uruzgan, where Australia's 1,550 troops are based. It did not comment on a report they are guerrillas loyal to a powerful warlord.

"The Afghans invited to Australia will fight side by side with our special operations soldiers, which is an important part of our efforts to stabilise Uruzgan," a spokesman told AFP.

The Afghans "have been intimately involved in the planning and execution of training objectives during the final phase of field based training," he added.

Defence chief Air Chief Marshal Angus Houston said the exercises were aimed at preparing Australian troops for warfare in Afghanistan, where the country has lost 21 soldiers.

"They are brought over here to do the final part of preparations for the next deployment," Houston told reporters.

"The important thing everybody needs to understand is this makes the operating environment safer for the Australian troops who are going to deploy."

Fairfax newspapers said guerrillas loyal to warlord Matiullah Khan, reputedly Uruzgan's most powerful figure, were part of the programme.

The report said Dutch troops, who pulled out of Uruzgan in August, had refused to work with Khan because of his alleged links to murder and extortion, and blocked his appointment as local police chief.

Khan reportedly charges the United States and Australia millions of dollars a month to protect military supply convoys and is accused of having a similar arrangement with drug traders.

The Australian report also said Prime Minister Julia Gillard discussed cooperation with "warlordy types" during an October 2 meeting with President Hamid Karzai in Kabul, quoting a leaked summary.

Khan, a close ally of Karzai's brother, Ahmed Wali Karzai, reportedly denies allegations of corruption and human rights abuses, or of profiting from narcotics traffickers.

Professor William Maley, head of the Asia Pacific College of Diplomacy at the Australian National University, said Australia should be careful dealing with Muttiallah.

"Muttiallah is a classic example of the wisdom of the old warning that those who sup with the devil should use a long spoon," Maley told public broadcaster ABC.

"There are degrees of shadiness in Afghanistan but his forces have been accused at different stages of having run extortionate road blocks in various parts of the province.

"And there have even been suggestions that they have engaged in activities to simulate those of the Taliban so as to justify the continued role that they claim to play within the province."

Gillard this month warned that Australia could be facing another decade of involvement in Afghanistan, where efforts to subdue the Taliban have already lasted nine years.

Australia's mission is to train Afghan forces until they are capable of taking over peacekeeping duties in Uruzgan.