A car bomb exploded outside a British security contractor’s compound in Afghanistan's capital Kabul, before a gun battle erupted outside the facility, leaving at least 10 dead and 19 wounded, officials in the country said.

Blaming the attack on Taliban insurgents, Najib Danish, a spokesman for the Interior Ministry said: “A number of gunmen entered the G4S compound right after the car bomb."

He added that the country's security forces had engaged them in a gun battle in a bid to secure the site, which they later swept in case others were hiding somewhere nearby.

G4S, which has its global headquarters in London, confirmed one of its locations in Kabul had been involved in an “incident”.

The Foreign Office said it was aware of the attack, and that Afghan security forces were responding. It was working with the authorities to establish further detail, it added.

G4S, one of the world’s biggest security groups, is one of a number of foreign security contractors operating in Afghanistan and provides guards for the area around the British embassy.

“We can confirm that there has been an incident at one of our locations in Kabul. The situation is ongoing and we are coordinating with Afghan authorities to bring it to a conclusion,” a statement from G4S said.

Security forces block the roads at the site of a suicide bomb which was followed by an insurgent attack on forces in the area (AP/Rahmat Gul)

Zabihullah Mujahid, spokesman for the Taliban, claimed responsibility for the attack in a statement posted on Twitter.

An official from the public health ministry said at least 10 bodies and 19 wounded had been taken to city hospitals but with clearance operations still going on late into the night, there was no definitive casualty figure.

The G4S website says it is the largest secure outsourcing company in the UK and Ireland.

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“More than 10,000 customers, including 59 FTSE 100 companies, depend on G4S to provide them with a safe and secure way to deliver their services,” it adds.

The attack came hours after provincial officials said at least 30 civilians were killed along with 16 Taliban fighters during an overnight battle between Afghan government forces and insurgents in southern Helmand province.

Last week, more than 50 people were killed in Kabul when a suicide bomber attacked a banquet hall where a meeting of religious leaders was taking place.