"Results from the 2002 physical examination support adult-onset diabetes as the most important health problem seen in the Air Force Health Study" among veterans examined, the Pentagon said in a statement.

Agent Orange contains the highly toxic agent dioxin.

The results "suggest that as dioxin levels increase, not only are the presence and severity of adult-onset diabetes increased, but the time to onset of the disease is decreased."

Type 2 diabetes is the most common, becoming apparent around middle age and is characterized by a resistance to insulin and a relative lack of insulin secretion.

"A 166 percent increase in diabetes requiring insulin control was seen in those with the highest levels of dioxin" a finding consistent with animal studies, it added.

The results were gathered from a 2002 medical examination of 1,951 Vietnam veterans, an extension of an ongoing epidemiology study begun in 1982.

The agent orange results confirm reports dating from 1992 and 1997.

Veterans examined were among military who sprayed herbicides in Vietnam between 1962 and 1971 to destroy vegetation thus denying the North Vietnamese Army cover and access to crops.

The Americans were exposed to the toxic agent during missions or when carrying out maintenance work on aircraft.

A US medical report also established a link between exposure to agent orange and chronic lymphoid leukemia, also opening the way to compensation for American veterans.