(Recasts with arrival in Italy, previous LASHKAR GAH)

By Silvia Aloisi

ROME, March 20 (Reuters) - An Italian journalist, freed after being held hostage by the Taliban in Afghanistan, returned home on Tuesday amid political controversy over the conditions of his release.

La Repubblica reporter Daniele Mastrogiacomo was released by the Taliban on Monday after being held hostage for two weeks.

The kidnappers, who beheaded his Afghan driver, said they freed him after the Afghan government handed over four insurgent leaders, including the brother of military commander Mullah Dadullah. Italian media reports said five Taliban were freed.

"I think the price was too high," said Vittorio Feltri, editor of right-wing newspaper Libero, shortly after Mastrogiacomo arrived in Rome on an Italian government plane.

"To rejoice about the fact that five ferocious assassins have been freed is crazy," Feltri told a TV talk show. His paper ran a banner headline on Tuesday: "The government sold out".

A spokesman for Afghan President Hamid Karzai said a deal had been struck but would not give any details.

"The president ... had instructed security authorities to find out any possible way for the release of the Italian journalist in recognition for the friendship with Italy and its cooperation with Afghanistan," he told reporters. "A series of demands were made and they were met to some extent."

ITALIAN TROOPS

Italian daily newspaper La Stampa questioned whether the negotiations to free the journalist were hypocritical, given that Italy had deployed 1,900 soldiers to help NATO secure Afghanistan after the U.S.-led overthrow of the Taliban in 2001.

"If this is the just price chosen to pay to save the life of Mastrogiacomo, it's up to (the government) to show Italy is still able to continue fulfilling its role in Afghanistan without becoming the weak link in the international alliance," the newspaper said.

Italian Prime Minister Romano Prodi, who hugged Mastrogiacomo on his arrival in Rome, faces pressure from some leftist and pacifist allies to withdraw the troops.

Mastrogiacomo, who has been asked by Italian prosecutors investigating his kidnap not to make public statements before they can question him, did not speak to reporters.

His departure from Afghanistan marked the end of a day in which protesters blockaded an Afghan hospital where he was staying, demanding details of the death of his driver Syed Agha.

More than 200 relatives and friends of Agha protested outside the Italian-run hospital in Lashkar Gah, capital of southern Helmand province, demanding to talk to the Italian, who was kidnapped by the Taliban on March 5.

His translator, Ajmal Nakshbandi, is still being held.

Mastrogiacomo, initially accused by the Taliban of spying for British troops, described in his paper how he was forced to watch Agha be killed.

"I can still see it now," he said. "I get off my knees. Four young men grab the driver and shove his face into the sand. They cut his throat and continue until they have cut his whole head.

"He is not able to make a gasp. They clean the knife on his tunic. They tie his severed head to his body. They bring it to the river and let it go."

Agha was found guilty by a Taliban court of spying and was killed on Thursday, the Taliban say.

(Additional reporting by Abdul Qodous, Y.P. Rajesh and Syed Salahuddin in Afghanistan)

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