Trying to cut off funding for the Pakistani Taliban is no small challenge, but some Pakistanis can at least identify its sources.

"There are countless sources of Taliban funding: particularly, donations from local and foreign sympathisers, hijacking of NATO trucks, high-profile kidnappings and funds sent by those Jihadists living abroad or running their businesses in Pakistan," said Tahir Khan an Islamabad-based journalist who is believed to have contacts within the Pakistan Taliban.

Kidnapping high-profile figures and government officials for ransom is a primary source of income.

"It is very much evident who was behind the kidnapping of Tariq Aziz ud Din, a former Pakistani ambassador to Afghanistan," Khan said.

"It is not so much a local issue," said Dr. Ilyas Ansari, who teaches at the University of Management and Technology Lahore, who added the plots might have more motivation than just money. "Enemies of Pakistan are playing an active role in creating mistrust about the efficiency of Pakistani security forces, and they want to sow doubt on the security of its nuclear programme."

One kidnap victim was Abdur Rehman Zazai, a Peshawar-based Afghan business tycoon. His family delivered the ransom in dollars. Zazai, upon regaining his freedom, promptly moved himself and his family to Dubai.

Rumours about the release of leading Peshawar businessman Haji Liaqat Ali refuse to fade. They say that his freedom required a huge sum paid in Dubai.

"In this type of case, the route of payments is Peshawar to Dubai and sometimes Abu Dhabi through Hawala and Hundi, the informal ... means of payment," said a Federal Investigation Agency (FIA) official who asked not to be named. "People in Peshawar may deposit money with the local Hawala and Hundi holders without fulfilling any legal requirement, and within minutes the cash has reached its destination."

Hawala and Hundi live on as popular means of transferring money internationally to family members. Muslims living abroad who have little religious knowledge believe that Islam forbids them to use the banking system, so they rely on the systems they know.

The popularity of such informal cash transfer systems makes efforts to crack down on suspect banking accounts only marginally useful, Khan said.

"Money for 'holy' causes does not come through formal routes," Khan said.

Hawala and Hundi are difficult for authorities to curb, said Peshawar-based journalist Mohammad Ali. "After the 9/11 attacks, a law against money laundering was introduced in Pakistan."

However, he said, efforts to crack down on illicit transfers have barely dented the annual remittances estimated at US $4 billion. In his view, the system has the capacity to deliver US $15 billion a year, since its users are switching to permissible channels.

The authorities however say they can handle the problem. Asad Ali, an FIA official in Islamabad, said, "Pakistan is vigilant in controlling illegal and suspected money transactions, and a Special Investigation Group (SIG) has been established in the Federal Investigation Agency of Pakistan for this purpose."

Anybody wanting to make a transaction of more than $10,000 needs to justify it, he said, and can expect the authorities to prepare a Suspicious Transaction Report against him if he can't.

The new law against money laundering also compels banks to provide records of any transactions to the FIA if it demands them, he added.

Hijacking Afghan coalition vehicles and stealing international equipment and weapons are another major source of militant funding. "They attack these Afghan-bound trucks, ransack the items and destroy the remnants on the Pak-Afghan Shahrah Torkham in the jurisdiction of Khyber Agency. These looted items are being openly sold in Pakistan and Afghanistan's markets," a tribal businessman in Khyber Agency told Central Asia Online.

"I still remember the words of Hakeemullah Mehsud (leader of the Tehrik-e-Taliban Pakistan), when he said that (his organisation) didn't care who was supporting its cause," said Haroon Rashid, senior correspondent for the BBC Urdu Service in Islamabad.

"The Taliban have no shortage of money, because people throw money inside their vehicles whenever they slow down to drive over a speed bump in South Waziristan", Haroon said, quoting Hakeemullah.

Local donations, particularly collected on the pretext of helping impoverished madrassa students, constitute a major chunk of this aid.

"People in remote areas ... are providing money, wheat and brown sugar to these elements coming door-to-door asking for help in the name of poor students," Arshad Hussain, a resident of Takkar, a small village in Mardan said.

Locals are naive and do not know about the repercussions of their support for such elements. They have no TV sets, radio and newspapers to illuminate the events around them, Arshad said.