Pakistan has reacted angrily to an American claim that al-Qaeda terrorists are using the country as a "secure hide-out".

John Negroponte, the outgoing US spy chief, said yesterday that al-Qaeda is rebuilding itself in Pakistan - a claim immediately rejected by Islamabad.

It marks the latest bout of friction between the Bush Administration and the Government of President Musharraf over the presence and activities of Islamic fundamentalists in Pakistan.

The US has often complained in the past that Pakistan is not doing enough to clamp down on the militants and allows them to exploit Pakistan's long and porous border with Afghanistan to join the Taleban in its fight against Nato troops.

Yesterday, Nato troops claimed to have killed up to 150 fundamentalist fighters who commanders spotted crossing into Afghanistan.

Giving a written statement to the Senate Intelligence Committee, Mr Negroponte, who is the outgoing US National Intelligence Director, said that al-Qaeda was still the militant organisation that "poses the greatest threat to US interests", and claimed the group was building itself up in Pakistan, as well as in other countries.

"They are cultivating stronger operational connections and relationships that radiate outward from their leaders' secure hide-out in Pakistan to affiliates throughout the Middle East, North Africa and Europe," his statement said.

"Pakistan is our partner in the war on terror and has captured several al-Qaeda leaders. However, it is also a major source of Islamic extremism."

A statement from Pakistan's foreign ministry, however, dismissed the claim. "In breaking the back of al-Qaeda, Pakistan has done more than any other country in the world," the statement said.

The statement added: "It is also a fact that there are al-Qaeda elements active in the Middle East, North Africa and Europe, as Mr Negroponte has said, but it would be incorrect to link them to any remnants of al-Qaeda in Pakistan".

Thre is growing concern within the United States over the apparent lawlessness of the mountainous 1,400-mile Pakistan-Afghanistan border with Lt-Gen Michael Maples, the head of the US Defence Intelligence Agency, saying that it remained a haven for al-Qaeda and other militants.

The tribal areas on the border are also thought to be where al-Qaeda leader Osama Bin Laden and his deputy Ayman al-Zawahiri are hiding.

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