MI6 agents reportedly held talks with members of the Taliban in Afghanistan in order to convince them to stop fighting the country's government.
The Daily Telegraph cites intelligence sources as saying that meetings had taken place between members of the Secret Intelligence Service (SIS) and the Islamist rebel group.
The reports come after prime minister Gordon Brown denied discussions had been held with the insurgents when asked in the House of Commons.
The paper cites sources in the intelligence services as saying that SIS officers had promised to mentor the group after meeting with them in jirgas - meetings with tribal elders that follow Afghan traditions.
According to the paper, the talks took place under heavy security with British forces surrounding the area. The outskirts of the town of Laskhkar Gah in Helmand province, a previous Taliban stronghold, were apparently the site for the discussions
An unnamed intelligence official told the paper dozens of Taliban were present and it was believed that they were "important motivating figures" inside the rebel movement.
Both Britain and Afghan president Hamid Karzai have publicly urged the Taliban to lay down their arms in the hope of achieving national reconciliation in the strife-torn country.
Responding to the reports, shadow defence secretary Liam Fox told the Telegraph: "If this turns out to be untrue the prime minister will have some explaining to do to the British public."
Coalition forces invaded Afghanistan in 2001 to remove the Taliban, who were suspected of supporting al-Qaida terrorists, from power.