The office opens next month in Budapest, which is home to many Russian mafia leaders, who see the Hungarian capital as a well-situated portal to western Europe and the US.

"This will be truly a working squad," said Thomas Fuentes, chief of the FBI's organised-crime division. "They will develop and operate criminal informants. They will gather intelligence. There is no precedent for that."

The Hungarian government has requested help from the US in breaking up the Russian gangs that operate from Budapest. But by allowing the bureau to open a fully functioning office, Hungary has ceded more sovereignty than many other nations - the US included - would ever consider, US officials say.

FBI agents will have the right to carry weapons and, in conjunction with their Hungarian counterparts, to make arrests. The FBI will also have the final say in the hiring and firing of the 10 Hungarian agents who will work in the office alongside five US agents.

The bureau has long had agents posted in US embassies. It has also sent agents abroad temporarily to help foreign governments with major criminal investigations, as it did after the 1998 bombings of US embassies in Africa.

The push to set up a Budapest office has come from the FBI's organised-crime section and from the US embassy in Hungary.

Officials have had to overcome the concerns of some at the US state department that an armed clash between FBI agents and criminals could create an international incident.

The Hungarians, too, remain wary. It was only last week that the Hungarians and Americans reached agreement on sharing criminal intelligence. The Hungarians fear that highly sensitive evidence gathered by criminal investigators about the Russian mobs could be made public in US courts.

US officials say that if the FBI office in Budapest succeeds, it could be a model for similar offices in other regions struggling against Russian organised crime, including the Baltic states, Nigeria and South Africa.

One early target of the FBI's Budapest office is expected to be Semyon Mogilevich, a Russian who has operated out of Budapest for a decade. The FBI says Mr Mogilevich has engaged in trafficking of drugs, refugees and weapons, has run prostitution rings and has tortured and murdered his opponents. His lawyer denies that his client has committed any crime.

"Our objective is to strangle the Russian mafia that operates here," said the US ambassador in Hungary, Peter Tufo, who has been an enthusiastic advocate of the FBI's war on the Russian mafia.

He said that the Russian mob was a global operation reaching from Moscow to Budapest to New York, Los Angeles and Miami. "It's a multi-billion-dollar global enterprise."

Another major Russian crime group, the Solntsevskaya organisation, has stepped up its operations out of Budapest, Mr Tufo said.

An FBI report in 1995 described the Solntsevskaya organisation as the most powerful Eurasian organised-crime organisation "in the world in terms of wealth, influence and financial control".

Mr Fuentes said the bureau was prepared for criticism from some quarters that the FBI should concentrate on combating crime at home. But he said the activities of the Russian mob were "a direct threat to us".

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© Guardian Newspapers Limited 2000