The leaked Nato report predicting eventual Taliban victory in Afghanistan is immensely damaging. Its potential impact is akin to that of a hand grenade carelessly rolled across the floor of a crowded room. The resulting mayhem, if it explodes, could be both extensive and indiscriminate. Little wonder Nato spokesmen and Pakistan's foreign minister are fervently insisting the report is a dud.

Even if the document is merely a discussion paper, based on raw data compiled from prisoner interrogations, its mere existence gives comfort to the enemy, to use the old phrase. Its headline finding – that the Taliban, backed by Pakistan, will return to power in Afghanistan once foreign forces finally leave in 2014 – will come as no surprise to critics of the war. They have glumly predicted precisely that outcome for some time.

But the fact that senior Americans inside Nato appear to share this view, and that they - or French colleagues keen to justify the recently announced early French withdrawal - have allowed their conclusions to find their way into the hands of the media, has seriously negative implications on a range of fronts.

Politically speaking, the timing could hardly be worse. Leon Panetta, the US defence secretary, is due in Brussels on Thursday for the first top-level Nato meeting since Barack Obama unveiled proposals to cut the US troop presence in Europe by half. This would have been enough by itself to ensure an uncomfortable visit. Now Panetta may face a full-blown crisis over the future of Nato's International Security Assistance Force (Isaf) in Afghanistan.

The sudden, unilateral decision by the French president, Nicolas Sarkozy, to bring forward the departure of France's contingent by a year after an Afghan soldier killed four French troops last month has angered other coalition members. Coincidentally or not, the leaking of the report might be seen as helpful in justifying Sarkozy's decision.

Whatever the truth of the leak, France's accelerated retreat has raised fears that other panicky Nato allies may follow suit in a disorderly rush for the exit. Even Britain, Washington's most loyal satrap, has let it be known that it will not be left "holding the baby" in Helmand province as others pull out.

The leaked report, undermining political will and eroding military morale, renders all these issues more problematic. It also raises a question mark over the Nato heads of government summit in Chicago in May, when Obama is hoping to celebrate achievements in Afghanistan, Libya and elsewhere as part of the warm-up to his November re-election bid.

The report's specific claim that Pakistan's Inter-Services Intelligence (ISI) agency is actively aiding and abetting the Taliban, offering advice to its leaders and safe havens to its foot soldiers, will further damage US-Pakistan relations. They were just beginning to recover from an all-time low sparked by the killing last May inside Pakistan of Osama bin Laden, rows over CIA activities and numerous cross-border incidents.

Leading US figures, including the former chairman of the joint chiefs, Admiral Mike Mullen, have repeatedly accused the ISI and Pakistan's military of playing a double game. These claims, never withdrawn or persuasively refuted, have now been reinforced. Pakistan's weak civilian government is currently reviewing its ties with the US. It's fair to say the prospect of an early rapprochement has again been set back.

Meanwhile, the ostensibly opposed Pakistani forces of establishment anti-Americanism and Islamist extremist rejectionism will probably be perceptibly strengthened, at the expense of the Gilani government in Islamabad. These forces are not only inimical to a peaceful Afghan settlement. They also threaten the integrity of the Pakistan state itself, already seriously damaged by Afghan war spillover.

Collateral damage extends to the spluttering peace process with the Taliban. Hopes of some sort of diplomatic solution centre on the opening in Qatar of a Taliban office acting as a conduit to the US, and possible Saudi facilitation of direct talks between Hamid Karzai's government and Taliban groups. But as commentators were quick to point out, the report reduces the already slim incentives the Taliban have to talk peace.

If even their enemies believe they will eventually come out on top, they may calculate, then why shoulder arms now? Washington's call for a ceasefire as a precondition for talks had already been rejected. If anything, the leaked report will encourage Mullah Omar, the Pakistan-linked Haqqani network and other factions to redouble their efforts to inflict maximum damage and humiliation on retreating western forces.

Spare a thought, too, for the dolorous impact of Wednesday's developments on ordinary Afghans and rank-and-file western soldiers sent to assist them. Contrary to US claims, violence affecting the civilian population is at a higher level than at any time since the 2001 invasion that followed the 9/11 attacks. There is a good chance that it will get still worse as Nato's withdrawal date nears.

The hundreds of thousands of Afghan army soldiers and police, trained by Nato, and now taking security control of ever larger chunks of the country, face frequent western criticism. But the vast majority who do a valiant job in appalling circumstances may justifiably feel that the ground has been cut from under them by faraway desk-generals.

So, too, may dutiful British squaddies sent to do their honest bit in Helmand. If top commanders already feel the war is lost, then the question must be asked for the thousandth time: why are we still fighting?