Is Commander Inayatullah a courageous law-and-order crusader responsible for smashing the drug mafia in his hamlet? Or, is he an opium smuggler? Or, as his bosses say, is he both?

It's a question that hangs over more and more public officials here. The post-Taliban boom in opium production means that drug money now permeates every stratum of Afghanistan's society - from the farmers cultivating poppies in the east to those in the highest levels of the central government of Kabul, according to senior Afghan and European officials working here.

"We are already a narco-state," says Mohammad Nader Nadery at the Afghan Independent Human Rights Commission, which has studied the growing impunity of former military commanders and drug dealers who now work within the Afghan government. "If the governors in many parts of the country are involved in the drug trade, if a minister is directly or indirectly getting benefits from drug trade, and if a chief of police gets money from drug traffickers, then how else do you define a narco-state?"

Abdul Karim Brahowie, Afghanistan's minister of tribal and frontier affairs, says that the government has become so full of drug smugglers that cabinet meetings have become a farce. "Sometimes the people who complain the loudest about theft are thieves themselves," he says.

In the past two years, the UN reports that poppy cultivation increased by two-thirds in 2004 to 51.7 million acres. The US estimate was even higher - at 87.5 million acres. Afghanistan now produces 90 percent of the world's opium - most of it ends up on the streets of Europe and Russia as heroin. European officials warn that this fledgling democracy is being undermined as Afghan officials make decisions based on what's good for the drug trade, rather than the electorate.

"There is a danger that all the stabilization and reconstruction efforts will be neutralized unless the narcotrafficking problem is addressed," says Ursula Müller, political counselor at the German Embassy in Washington. "We have to fight this corruption ... those guys involved in the drug business [who] are in all levels of Afghanistan's government," adds Ms. Müller, who has been actively involved in rebuilding Afghanistan since the US toppled the Taliban in late 2001.

The Afghan government of US-backed President Hamid Karzai has made countering the narcotics trade - over fighting terrorism - its central aim. And the international community, with Britain taking the lead, is planted firmly behind him. Germany, for example, is training local Afghan police, and the US has budgeted $780 million this year to support the antinarcotics battle.

But the opium trade is deeply rooted in Afghan society. Many regional warlords and opponents of the Taliban are now top officials in the Karzai government. One of the most complicated - and delicate - tasks is to get corrupt officials to turn away from the drug trade as a source of personal income.

Müller says it can be done. She tells of a former Afghan provincial official who was nominated to become a deputy minister in Kabul. "We had doubts, and the [Bush] administration had doubts about him," Müller says. "It was an open secret that he was heavily involved in the drugs business."

But, she says, he has turned his back on his former trade and has become a responsible government official leading efforts to staunch the illicit drug business.

The effort in working with local governors has been mixed, though, according to Steve Atkins, a spokesman for the British Embassy in Washington.

Britain provided funding and advice to Afghans on an eradication program in 2004. Governors who participated claimed they eradicated 37,000 acres, but a verification team found that only 13,000 acres had actually been eradicated.

"We have always been clear of the limitations of the governor-led eradication, given that many governors are themselves implicated in the trade," says Mr. Atkins.

The problem, as illustrated by Commander Inayatullah's case, starts at the lowest levels of government. Three months ago, the Afghan police chief made his biggest drug bust yet. In a village in the northeastern province of Badakhshan, the commander arrested a suspected smuggler named Safiullah, and at the time confiscated 80 kilos of opium. But Inayatullah later refused to hand over the opium to the provincial police as evidence, say police officials. He was fired. The provincial police officials also say that Inayatullah may have arrested Safiullah only to get rid of competition from a fellow opium trader.

But Inayatullah steadfastly maintains his innocence.

"I cannot see the minister of interior directly to ask him what the evidence is against me," says Inayatullah, who is in Kabul awaiting reassignment in another district. "I'm the only police commander who has arrested smugglers in Badakhshan. Why am I accused of smuggling?"

Afghan officials interviewed say that Inayatullah's case isn't an isolated one. They say that the people facilitating the drug trade are often the very people who have been assigned to stop it - the police. But these police would not be able to act alone, they say, without the knowledge or consent of their superiors, including governors, provincial police chiefs, and even deputy ministers.

"Whatever number of police cars there are in Kabul, I can tell you that more than 50 percent of them are carrying drugs inside from one place to another," says a senior police commander in Kabul, requesting anonymity for his own safety. "The problem is that Afghanistan is training police to stop drug smugglers, and when they go out into the field, their police commander tells them how to protect the drug smugglers."

Those who confront the drug lords often find themselves in danger. Syed Ikramuddin, former governor of the northern province of Badakhshan, was nearly assassinated by a roadside bomb last October, as was vice presidential candidate Ahmed Zia Massoud in Faizabad. Mr. Ikramuddin survived, but the person sitting next to him was killed and two others were injured.

"Except for the minister of the interior himself, Mr. Ali Jalali, all the lower people from the heads of department down are involved in supporting drug smuggling," says Ikramuddin, who now serves as Afghanistan's minister of labor.

Ikramuddin says that many of these policemen and commanders are former warlords who have disarmed and reintegrated into government jobs, and are now using their position to facilitate the drug trade and get rich.

Among those corrupt commanders, he says, is Inayatullah, the police chief from Yawan, a district in the former governor's province. "Commander Inayatullah is a smuggler, I know him well," Ikramuddin says. "There is a competition among smugglers, that is why Inayatullah arrested Safiullah and the others. It's not to do his job honestly, but just to weaken a competitor."

The police chief who replaced Inayatullah is involved in the drug trade, according to several interior ministry officials. Kabul officials have ordered that he be removed from the position but say he is being protected by provincial police authorities. One senior Interior Ministry official says that the new chief paid a $60,000 bribe to get the job.

Despite corruption in the police ranks, many Afghan politicians say that Afghanistan's drug problem can be solved. "People inside the mafia should be introduced to the power of law," says Yunous Qanooni, a former presidential candidate in last year's elections and a top leader in the northern-based mujahideen party, Shura-e Nazar. "I'm sure that this will solve 70 percent of the problem, and the remaining 30 percent will be solved easily, step by step."

Minister of Labor Ikramuddin agrees that Afghanistan's drug problem is solvable, both with outside help and a little more political will from within. "If the world could not tolerate Afghanistan as the center of terrorism, then the world is not going to tolerate Afghanistan as the world's biggest producer of drugs. If we have good and honest people in this government, then gradually this problem can be solved. The carpet of the smugglers will be rolled up forever."

But Commander Inayatullah, the former police chief of Yawan, warns: "If we don't solve the problem now, there will be a day when all decisions will be made by smugglers."

• On Monday: Will poppy eradication programs work in Afghanistan?