Budapest - NATO was expected to approve a controversial plan to help Afghanistan fight its thriving drugs industry, whose profits are used by the Taliban to fund the insurgency, diplomats said Friday.

"We are confident that a deal can be reached," a source close to the negotiations told Deutsche Presse-Agentur dpa.

On Thursday, Afghan Defence Minister Abdel Rahim Wardak asked his NATO colleagues meeting in Budapest to 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 also argue that more needs to be done to fight the opium and heroin trade, a view shared by most of the allies. The Taliban are thought to be pocketing 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," US Defence Secretary Robert Gates said in Budapest on Thursday.

However, countries like Germany, Spain and Italy retort that the fight against illegal drugs is not part of the NATO mandate. They also worry that bombing laboratories would kill civilians and undermine the alliance's popularity among ordinary Afghans.

NATO Secretary General Jaap de Hoop Scheffer acknowledged on Thursday that the talks had been "complex". But he also expressed confidence that a deal could be reached.

Ahead of the meeting, diplomats said one possible solution would be to allow only willing NATO members to "opt-in" on the fight against drugs.

Defence ministers were later set to meet their Georgian colleagues to discuss ways in which the alliance can help rebuild the country in the aftermath of its August conflict with Russia.

That meeting coincided with an internationally-brokered deadline for Russian troops to withdraw from core Georgia. (dpa)