KABUL (Reuters) - Afghan President Hamid Karzai issued a decree on Tuesday setting a deadline of four months to disband private security companies despite concerns by Washington over the plan.

Afghan President Hamid Karzai speaks during his visit to the Civil Service Institute in Kabul August 7, 2010. REUTERS/Omar Sobhani

The Pentagon called the deadline “very challenging” but said the United States would work with the Afghan government and seek to improve oversight and management of private security firms, long an irritant to Afghans.

“Obviously that is a very aggressive timeline and one which I think our forces and commanders as well as the State Department and (U.S.) ambassador will be working with the government of Afghanistan to achieve,” Pentagon spokesman Bryan Whitman told reporters.

The U.S. Embassy in Kabul said it supported the Afghan government’s intention to regulate such firms properly. “There are questions of implementation, however,” embassy spokeswoman Caitlin Hayden said in a statement.

The decree said the private security firms were being banned to avoid the misuse of weapons which had caused “horrific and tragic incidents.”

It was issued just hours after Karzai met influential U.S. Senator John Kerry, the Democratic chairman of the Senate Foreign Relations Committee.

Kerry said before the decree was issued that he agreed it was in Afghanistan’s interests not to have “a whole bunch” of private security firms and that Karzai’s concerns were legitimate, although a reasonable timeframe was “up for grabs.”

Such firms employ up to 40,000 people working mainly for Western enterprises in Afghanistan, as well as the U.S. military guarding checkpoints and other roles. There were 52 licensed private security firms operating in Afghanistan, Hayden said, and “numerous others” unlicensed.

“We are still gathering information about how this decree would affect the United States and companies with whom we have contracts,” she said.

The decree includes an exemption for firms whose guards work inside compounds used by foreign embassies and international businesses and aid and charitable organizations, even though Karzai’s office said last week there would be no exceptions.

Firms being disbanded either could sell their weapons to the Afghan government or take the equipment with them as they leave if the companies were properly registered. Unregistered firms would have their weapons confiscated, it said.

The visas of their employees would also be terminated.

Karzai, whose government faces September 18 parliamentary elections, has been trying to assert his independence from his Western backers and stepped up criticism of the firms last week, saying they were too costly and were “daily creating miseries.”

The ban’s swiftness appeared to catch some by surprise, especially as it was issued so soon after Karzai met Kerry.

SCANDALS

Karzai has long called for the disbanding of such companies, which compete for contracts worth billions of dollars. The push to scrap the firms is linked to his ambitious 2014 timetable for Afghanistan to have overall security responsibility.

The decree said eligible Afghan employees of private firms could volunteer to join the Afghan security forces.

The companies, which are not accountable to the Afghan government, have been a source of friction for some time and subject to a series of scandals.

Many Afghans see them as operating with impunity, their heavily armed guards forcing their way through traffic a common sight on Afghan streets.

Karzai’s government tried unsuccessfully last year to register the firms, find out the amount of arms they had and where they came from, and how much money the industry was worth, an Afghan security source has said.

The U.S. State Department said last year it would review its use of contractors at overseas embassies after a scandal over sexual hazing by security guards at its Kabul mission.