Afghan President Hamid Karzai's chief of staff has been receiving millions of dollars in cash payments from Iran, the New York Times reported Saturday.

The advisor, Umar Daudzai, briefs Karzai each morning and is known for pushing anti-Western policies, the Times said.

Citing unnamed Afghan and Western officials in Kabul, the newspaper reported Iran had been using its influence in attempt to weaken Afghan ties to the U.S. and NATO, as well as further its own interests in the country.

The payments Daudzai receives are deposited into a secret fund that he and Karzai have used to pay the country’s lawmakers, tribal leaders and Taliban commanders to secure their loyalty, the report said.

"It’s basically a presidential slush fund," one Western official told the paper. "Daudzai’s mission is to advance Iranian interests."

Karzai, his chief of staff and the Iranian ambassador in Kabul— whom the Times says officials identified as once handing Daudzai a sack of cash—have declined to answer questions about the relationship between their countries. Likewise, the newspaper reported that several officials have said that there is no truth in the allegations.

Iran consistently viewed the presence of the U.S. in Afghanistan as a threat, and President Mahmoud Ahmadinejad has urged countries in the region to cooperate with one another, instead of looking to the U.S.

"The issue of Afghanistan should be solved in the region. Others cannot solve it. They could not do it in Iraq," Ahmadinejad said during a summit of Farsi-speaking countries that included Afghan President Hamid Karzai in early August.

Foreign military commanders and some Afghan officials have also accused Iran of providing weapons to the Taliban, to help support their insurgency in Afghanistan.

Tehran denies the charges and senior Afghan administration officials say they have no evidence against Iran.

Click here to read more on this story from the New York Times.

The Associated Press and Newscore contributed to this report.