An Afghan government flag was finally run up today over the bazaar town of Musa Qala, in place of the Taleban flag that had flown there defiantly for ten months.

The success will provide a much-needed boost for the Kabul Government and its demoralised supporters although the military operation to retake the town in northern Helmand province was more difficult than expected and mopping-up operations may continue for days.

Two British soldiers died in landmine explosions and the attacking force had to fight its way slowly into the town centre building-by-building, at risk from ambushes and booby traps. Nato now faces the greater challenge of keeping the Afghan flag flying there.

The town is at the end of a long, potholed road through guerrilla territory which hampers resupply operations. Overstretched British forces can barely afford the manpower for a garrison, and a resentful population must now be won over after months of bombardments by Nato around their homes and the ejection of Islamists who many had sympathised with for bringing security to their notoriously lawless town.

It remains unclear how many civilians had died in the four-day battle, but local people say the Nato operation had involved massive bombing by B-52s as well as round-the-clock ground attacks by helicopter gunships.

Although recapturing it was an important victory for the British, most of the town's Taleban defenders appear to have escaped into the mountains to fight another day. Afghan officials said that a few diehards had fought to the end, possibly foreign fighters who had answered a Taleban call for a jihad made recently.

Hamid Karzai said that he had given the order to retake the town after its residents appealed to the Afghan President to end Taleban atrocities, citing the case of a teenage boy who was burnt to death.

But when the Government had controlled Musa Qala, in name at least, it resembled the Afghan version of a fly-blown border town from a spaghetti western.

Armed robbers and small-time warlords had a free reign, development projects were promised but hardly ever got going, local officials were almost universally regarded as corrupt or incompetent, or both, and the only part of the economy that functioned was the opium trade.

Nato spokesmen have promised that things will be different now, and the need to repair war damage and get an administration up and running will once again make Musa Qala a test case for Nato.

Lieutenant-Colonel Richard Easton, the British military spokesman, said: “We have a plan ready, and we will want to demonstrate that people will be better off with the Afghan Government than they were with the Taleban.” Part of the plan is to garrison the town with Afghan National Army troops, probably under the direction of British trainers, and to set up better supply lines.

One likelihood will be the rapid development of a small military airbase. The other part is rebuilding and getting development projects under way, including "quick impact" projects organised by the large number of civilian experts from the Department for International Development and the Foreign and Commonwealth Office who are now permanently based in Helmand. Wells and irrigation projects will be top of the wish list for the poverty-stricken farmers around Musa Qala.

Nobody thinks the Taleban will stop their fight in the area, and local people bitterly recount how, since 2001, they have repeatedly been promised much but received little, stirring grievances that rebels can exploit.

One town elder, Naim Khan, told The Times: “Last time the foreign soldiers were in Musa Qala they were going to do so many things for us. But in the end, nothing happened. This made people angry.”

An Afghan engineer who has worked in the town said: “The people of Musa Qala are not anti-foreigner but they don’t like armed men. They don’t mind foreigners who come to help them, if that is what they really do.”

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