The report was written for the London School of Economics by Matt Waldman, a Harvard University researcher, after interviews with nine Taliban commanders and a host of former Taliban officials.
It concludes Pakistan military intelligence not only funds and trains Taliban fighters in Afghanistan, but "orchestrates, sustains and shapes the overall insurgent campaign" and is officially represented on the Taliban's leadership council.
"Interviews strongly suggest that support to the Afghan insurgency is official ISI policy," the study says.
"It appears to be carried out by both serving and former officers, who have considerable operational autonomy.
"As the provider of sanctuary and substantial financial, military and logistical support to the insurgency, the ISI appears to have strong strategic and operational influence -- reinforced by coercion," it adds.
"There is thus a strong case that the ISI orchestrates, sustains and shapes the overall insurgent campaign."
A spokeswoman for Asif Ali Zardari, the Pakistan President, dismissed the claim as "absolutely spurious," while Major-General Athar Abbas, a military spokesman, called the findings "rubbish."
"It's the same old story, which provides no credible evidence. It is misleading with malicious intent. We reject it," he said.
U.S. and NATO officials have long complained current and former members of Pakistan's powerful Inter-Services Intelligence agency (ISI) have maintained links to the Taliban in spite of their government's decision to denounce the group after 9/11.
But Mr. Waldman's report says the current relationship with the Taliban "goes far beyond contact and coexistence" and is an official policy that extends to the highest levels of the Pakistani government.
In one instance, he cites a Taliban commander who described a meeting in late March or early April this year in which Mr. Zardari and senior ISI officials allegedly visited 50 high-ranking Taliban members held in a secret prison in Pakistan.
Mr. Zardari told the Taliban they had been held as a result of pressure from the United States. "You are our people, we are friends and after your release we will of course support you to do your operations," he is supposed to have said.
Farah Ispahani, Mr. Zardari's spokeswomen, dismissed the account as "baseless," saying, "There seems to be a concentrated effort to try to damage the new Pakistan-American strategic dialogue."
Still, the study insists "indications of significant ISI involvement at a strategic level are compelling and are consistent with reports of their influence in the field."
"Insurgents believe the ISI shapes their operations in a powerful, surreptitious and coercive way," the study says.
"Directly or indirectly the ISI appears to exert significant influence on the strategic decision making and field operations of the Taliban; and has even greater sway over Haqqani insurgents. According to both Taliban and Haqqani commanders, it controls the most violent insurgent units, some of which appear to be based in Pakistan."
The report says most insurgent commanders believed Pakistan's ISI is a participant or observer on the Taliban's supreme leadership council, the Quetta Shura, and may control up to half the council's seats.