The Pentagon is investigating an official who is alleged to have set up a private network of spies and informants to track and kill Taliban militants in Afghanistan and Pakistan.

The effort, first described in the New York Times, was initially aimed at gathering political and cultural information about the region to aid the US military campaign. A Pentagon official, Michael Furlong, is alleged to have set up the network to develop intelligence to be used by military units to track and target insurgents.

The defence department cancelled part of the contract amid allegations that Furlong had diverted money earmarked for gathering information.

"The story that we've seen in the New York Times makes some serious allegations and raises serious questions that warrant further review from the Pentagon," said a Pentagon spokesman, Lieutenant Colonel Mark Wright. "We're looking into it."

Military officials told the New York Times that Furlong, a former air force officer, claimed his network of informants had gathered information which the military used to kill suspected militants who were transporting rockets over the border.

An associate of Furlong's said he had boasted of having a team of "Jason Bournes" at his disposal, referring to the fictional American assassin in Robert Ludlum's novels, who was played by Matt Damon in a series of Hollywood films.

Furlong is also said to have boasted over the summer that he was working to free a US soldier being held captive by the Taliban and that contractors working for him had been hired to try to free David Rohde, a New York Times reporter kidnapped by Taliban militants.