Australia has awarded a $20 million two-year contract guarding diplomats in Kabul to a private security company owned by a special forces soldier turned British lord and that once hired a former South African apartheid-era assassin.

The move is part of an increasing trend by the government to contract out the security of diplomats in the world's most dangerous locations, instead of using Australian soldiers.

The cost is also double the amount of the previous contract, held by another major international security company, Control Risks Group.

''The complex and volatile security environment in Kabul requires the provision of high-quality security protection,'' a spokesman for the Department of Foreign Affairs said.

The spokesman would not comment on the reasons behind the increase in the contract's cost, but said the ''nature, complexity and scale'' of the work in Kabul had increased. This was due to ''expanding staff numbers and additional operational sites requiring increased protected travel and static guarding services,'' he said.