WASHINGTON: Terrorism pays. That may well be the message the United States and its allies send out to the world this week as they line up billions of dollars in aid to Pakistan despite the country���s military and intelligence agencies being implicated by American officials in acts and practice of terrorism.

Ignoring confirmation about the Pakistan���s continued support and use of terrorism obtained through electronic surveillance and informants, and even brazen affirmation by Pakistani officialdom itself, the Obama administration is set to lavish a bonanza that might eventually add up to more than $ 30-$ 35 billion over the next decade.

About half the windfall will come from the US and the other half from its allies such as Japan, EU, and Gulf countries.

Washington is set to announce its largesse of around $ 15 billion of US tax-payer money in course of its new Af-Pak policy to be unveiled Friday, followed by a conference in Tokyo on April 17 of the so-called ''Friends of Pakistan'' where Islamabad is pitching for $ 10 billion.

This is in addition to the $ 7.6 billion pledged by the IMF and various donors, all at the instance of the United States, which believes Pakistan will disintegrate, with disastrous consequences all around, if it is not rescued with massive amounts of aid.

Congressional staff and sources associated with drawing up the aid package say there will be stringent conditions and tough oversight attached to the assistance, but critics of the policy regard the assurances as credulous. The Indian government has not opposed the package. ''If they (the United States) have not learned from the past, there is little we can do,'' one official said on background, referring to the Reagan era bonanza when untrammeled support for Pakistan���s military emboldened the country to adopt terrorism as a state policy.

That policy is still very much in place, going by a stunning page one New York Times account on Thursday in which Pakistani officials admit first-hand knowledge of ties between the ISI and extremists and even justify. They tell the paper that the contacts are less threatening than the American officials depict and are part of a strategy to maintain influence in Afghanistan for the day when American forces would withdraw and leave what they fear could be a power vacuum to be filled by India.

''In intelligence, you have to be in contact with your enemy or you are running blind,'' the paper quotes a senior Pakistani military officer as describing Islamabad���s strategy of backing the terrorists. But evidently, Pakistan's activity constitutes more than just contact with the enemy.

The NYT account, striking for the candid detail revealed by unnamed US and Pakistani officials, said Pakistan���s support to the Taliban and other militant outfits is coordinated by operatives inside the shadowy S Wing of the ISI. The report says the ISI also shared intelligence with Lashkar-e-Taiba accused in the Mumbai attacks and ''provided protection for it.'' It did say when this cooperation and protection took place.

But other new details reveal that the ISI is aiding a broader array of militant outfits with more diverse types of support than was previously known, even months after Pakistani officials said that the days of the ISI���s playing a double game had ended, the paper reported. One such outfit is the Haqqani network, which by American accounts bombed the Indian Embassy in Kabul with help from the ISI.

The attack killed 54 people, including an Indian diplomat and a military commander. Pakistan���s army chief Pervez Kiyani, a former ISI Director-General, subsequently described the Haqqani network as Pakistan���s ''strategic asset.''

But according to the NYT, the ISI���s S wing not only helps such networks with fuel and ammunition to fight American troops in Afghanistan, but also replenishes its ranks with recruits from madrassas in Pakistan. There is even evidence that ISI operatives meet regularly with Taliban commanders to discuss whether to intensify or scale back violence before the Afghan elections, it said.

None of this appears to have made a whit of a difference in the planned US largesse for Pakistan. If anything, US officials and analysts argue it is all the more reason to rush aid to Pakistan so that its democracy and social sector can be strengthened and it can be walked away from the abyss. ''If there is a better way to do this, we are all ears,'' a senior Congressional aide involved in the process, said. While some analysts say that Pakistan extracts aid by pointing a gun to its own head, key figures in the Washington establishment don't want to take the chance that Pakistan ends up falling into the abyss.

US officials, who typically make strenuous effort to shield the Pakistani leadership from charges of fomenting terrorism, maintain that mid-level ISI operatives cultivate relationships that are not approved by their bosses. They say it is unlikely that top officials in Islamabad are directly coordinating the clandestine efforts. But Pakistani officials themselves appear to scoff at American credulity in the NYT report, saying it is part of their long term strategy to keep their options open when the U.S withdraws from Afghanistan.

That expectation got a boost this week when US President Barack Obama spoke of an ''exit strategy'' in Afghanistan. Although Obama did not specifically refer to any troop withdrawals (on the contrary, he has just directed induction of 17,000 more troops), the fact that Washington is even contemplating an exit strategy seems to justify Pakistan���s outlook of keeping its Taliban and terrorism powder dry.

