Despite repeated denials, the CIA has now confirmed that US security contractor Xe Services, formerly known as Blackwater, has been operating in Pakistan.
CIA spokesman George Little said that agency Director Leon Panetta has terminated a contract with Xe services that allowed the company's employees to load bombs on CIA drones at secret airfields in Pakistan and Afghanistan.
Although the spokesman denied that Blackwater was currently involved in CIA operations in Pakistan and Afghanistan, his comments, contradicted past US assertions that the company does not operate in Pakistan.
Other than the US administration, the Pakistani government and Xe itself had denied that the company was operating in Pakistan.
Little did say, however, that the contractor still provides so-called security or support assistance to the US intelligence agency in the two countries. He did not elaborate further on exactly what that role involves.
While the New York Times published CIA's claim that Blackwater employees no longer have an operational role in the agency's covert programs in Pakistan and Afghanistan, the Guardian posted a quite different article.
Citing comments from an unnamed former US official, the British daily reported that Blackwater was still operating in Pakistan at a secret CIA airfield used for launching drone attacks.
According to the official, who has direct knowledge of the operation, Xe employees patrol areas surrounding the Shamsi airbase in Pakistan's Baluchistan province.
Blackwater gained its notoriety mainly from its activities in Iraq and Afghanistan.
Iraqis have launched several cases against the company in US courts over violent attacks carried out by the company against unarmed people, including an unprovoked 2007 shooting spree in Baghdad that killed 17 civilians.
After the Baghdad incident Blackwater changed its name to Xe Services.
The company CEO Erik Prince also is facing allegations by a former US marine and a past employee that he organized the murder of witnesses that could have testified against his company during the hearings.
He has also been accused by the two witnesses, whose identities have not been disclosed by the courts for safety purposes, of having anti-Muslim sentiments, "encouraging and rewarding the destruction of Iraqi life", and arms smuggling.
CIA confirmation of Xe involvement in Pakistan comes a day after the New York Times reported that links between Blackwater and the CIA in Iraq and Afghanistan have been closer than has yet been disclosed.
A US Congressional committee is apparently investigating links between Blackwater and American intelligence services.
The paper said that Blackwater staff had participated in clandestine CIA raids.
Blackwater is a sensitive subject in Pakistan where its name is associated with drone strikes, bombings and violent activities that have left hundreds of civilians dead.
Before the US avowal, some Pakistani TV stations had already aired images of what seemed to be "Blackwater houses" in Islamabad. Several papers had also published reports accusing certain US officials and journalists of being Xe operatives.
Pakistan's interior minister, Rehman Malik, has even offered to resign if it is proven that Blackwater is present in Pakistan.
However, it remains to be seen whether he will keep that promise now that the CIA has confirmed that Blackwater is and was working in Pakistan.