Twelve tons of the drug, with a street value of several billion pounds, left Chile in 1986 and 1987 alone. The drugs, destined for Europe, have often been flown to Spanish territory by aircraft carrying Chilean-made arms to Iraq and Iran. Distribution to Britain and other European countries has been controlled by secret police stationed in Chilean embassies in Stockholm and Madrid.

The revelations will come as an embarrassment to the Conservative Party, which criticised Pinochet's arrest in London in 1998 and backed his fight to avoid deportation to Spain on charges of murder and torture. The news will be particularly unwelcome to Lord Lamont, the former Chancellor, who was in Santiago last week to deliver a letter of support to the former dictator from Lady Thatcher.

Under Conservative governments, large quantities of British arms were sold to Chile, and British firms such as Royal Ordnance collaborated with the development of Chile's weapons potential.

There can be no doubt that Pinochet, whose power was absolute between the 1973 coup and his surrender in 1990, was a party to trafficking. He declared in October 1981: 'Not a leaf moves in Chile if I don't move it - let that be clear.'

The secret police - originally known as the Dina and from 1977 as the SNI - was staffed by service personnel and helped Pinochet to torture and kill opponents.

The Dina's former director, General Manuel Contreras, declared to the Chilean supreme court in 1998 that he undertook nothing without Pinochet's express permission.

The huge profits from the drug deals went to enrich senior figures in Chile, with some going to finance the Dina/SNI operations.

Pinochet, who is now fighting arrest on kidnapping and murder charges in Santiago, has not clarified how he and his wife, Lucia, had $1,169,308 (around £730,000) in their account in the Riggs Bank in Washington on 1 March 1997. As commander-in-chief of the Chilean army, his annual salary in March 1997 was $16,000 (£10,000).

New evidence of Pinochet's collaboration with Colombian drug dealers, first sketched out last year in this writer's book, Pinochet: The Politics of Torture , has emerged in The Thin White Line , a new book by Rodrigo de Castro, a former international civil servant in Chile, and Juan Gasparini, an Argentine journalist. It quotes US court documents, Chilean police files and depositions by a former US marine involved in the trafficking.

The former marine, Frankell Ivan Baramdyka, was extradited from Chile in May 1993 and convicted in southern California of narcotics offences. He worked for US intelligence in the early Eighties and was encouraged to traffic in drugs on condition that some of the profits went to the Contra terrorists in Nicaragua, who were being supported by President Ronald Reagan.

Baramdyka has revealed how he first made contact with the Chileans in 1984 when, acting for Colombian cocaine producers, he delivered $2m to the Chilean consulate-general in Los Angeles. This was a payment for chemicals needed to make cocaine which had been supplied by the Chilean army.

At the time Pinochet's younger son, Marco Antonio, was on the consulate-general's staff.