By Adrian Croft
LONDON (Reuters) - British officials believe Afghan President Hamid Karzai's decision to step down at the end of his second term in 2014 greatly improves his country's political prospects, a confidential memo accidentally disclosed by a minister showed.
The memo, held by British International Development Secretary Andrew Mitchell as he left a high-level meeting on Tuesday and caught by a photographer, also expressed hope that talks between Afghanistan and the International Monetary Fund (IMF), which broke down in June, will get back on track soon.
The revelation of the views of Britain's international aid department on Karzai is embarrassing for the British government.
Britain, which has about 9,500 troops in Afghanistan battling Taliban insurgents and is a major aid donor, strongly supports Karzai in public. But Karzai has often had difficult relations with the United States and other Western backers.
"Karzai has publicly stated his intention to step down at the end of his second term (in 2014) as per the constitution. This is very important. It improves Afghanistan's political prospects very significantly. We should welcome Karzai's announcement in private and in public," the memo said.
The photographed document, shown on the Sky News and BBC websites, also says that the IMF plans to visit Afghanistan in September to resume negotiations with the Afghan government.
Talks between Kabul and the IMF broke down in June after the fund rejected Afghanistan's plans to deal with failed lender Kabulbank and other broader financial concerns. The step blocked the payment of $70 million (43 million pounds) in aid from foreign donors.
Although some words are partly obscured in the photograph by Mitchell's fingers, the document appears to say that the World Bank has told Britain that the suspension of British and other donors' funds to the Afghan government will soon begin to destabilise activities essential for a successful transition.
The gradual transition of security in Afghanistan from NATO to Afghan control is a cornerstone of Western policy.
PROGRESS WITH REFORMS
"We are hopeful that the government will have demonstrated sufficient progress towards credible reforms of the financial sector, and actions to address the Kabulbank fraud, so that a new (IMF) program can be agreed over the autumn," the memo said.
Kabulbank, Afghanistan's biggest private lender, failed after it issued hundreds of millions of dollars in unsecured loans to the country's political elite.
Afghanistan is heavily reliant on foreign aid. An IMF program is a critical seal of approval needed by most international donors before they pledge aid.
Mitchell's memo also questioned whether Britain was sending the right message about violence in Afghanistan.
"Afghan perceptions of violence are very important for their (Afghans') confidence in their future and for their readiness to work for the Afghan government. Have we got the strategic communications on levels of violence right?" it said.
Mitchell was photographed outside Prime Minister David Cameron's Downing Street residence as he left a meeting of the National Security Council chaired by Cameron.
He is not the first minister or official to be embarrassed by having a confidential memo photographed.
In April 2009, Britain's top counter-terrorism officer, Bob Quick, resigned after he was photographed in Downing Street carrying a secret document revealing plans to crack down on a group suspected of plotting attacks in Britain.
The government played down Mitchell's slip. His department said the papers were "of a routine nature."
(Additional reporting by Michael Holden)
