KABUL: Afghanistan appeared on Monday to offer more concessions over a ban on private security firms, saying companies would be allowed to work in the country until their existing contracts had expired.

President Hamid Karzai issued a decree in August banning all private security contractors in Afghanistan by mid-December, with an exception for those guarding embassies, military installations and diplomatic residences and personnel.

The move sparked concern in Washington that aid work in Afghanistan would suffer as many non-profit-oriented development projects rely on private security firms for protection.

General Abdul Manaan Farahi, who advises the Interior Ministry over the ban, said a new independent public security force would start securing international development projects as the private firms were shut down.

The new force would draw recruits from local communities and be separate from the national police service. Farahi also said all private firms, including those securing foreign embassies in the capital, would have to move their offices outside the city.

“Companies who have existing contracts or significant development projects can stay here until the end of their contracts,” he told a news conference in Kabul.

“They cannot renew their contracts and they ... should then disband their companies and leave Afghanistan.”

In October, Karzai offered a small concession to firms guarding aid projects by extending the original Dec. 17 deadline for disbandment until February.

Monday's announcement appeared to row back even further, not only allowing firms to finish their contracts - which in some cases could be several years - but also allowing some firms that secure NATO supply convoys to continue working.

Karzai's decree had specifically called for the disbandment of firms guarding convoys, singling them out as corrupt and tied to the insurgency. Farahi said seven firms securing Nato supply trucks would now also be allowed to finish their contracts.

A special 50-man police force would work with those seven companies to make sure they were operating legally and would report back to the Interior Ministry, he said.

The new public security force would also be established to guard development projects as contracts for private firms ended.

Donors would be expected to foot the bill for the security force until the development project was complete and wages would be paid through the Interior Ministry, Farahi said.

Although set up by the government, the scheme could raise fears among Western donors. Afghanistan has a long history of community defence initiatives, many of which have gone awry, and donors may be reluctant to fund another similar programme.

Critics already point to shortcomings within Afghanistan's existing police force, which suffers from poor training, high illiteracy rates and chronic retention problems.

Farahi said companies who continued to operate in the country would also have to follow stricter guidelines, including not being allowed to walk around armed and forbidden from blocking traffic on roads.  Security companies will also have to move their offices outside city centres.

Many Afghans see these companies as operating with impunity, and they have been accused of a series of killings, crimes and scandals but have rarely been convicted.

The concessions will apply to 52 firms, employing around 26,500 people, including around 3,500 foreigners, Farahi said.

A total of 54 companies who were operating illegally had already been disbanded and a further three were to close by the end of the week, he said.