(Adds fresh aid from Japan, minister comments)

By Isabel Reynolds

TOKYO, Feb 5 (Reuters) - Afghanistan called on Tuesday for more help to stamp out opium production as donor nations gathered in Tokyo to try to coordinate policy on the struggling nation.

Afghanistan produces more than 90 percent of the world's opium, used to make heroin, and the industry provides income for hundreds of thousands of Afghans, the World Bank and the British government said in a joint report issued the same day.

The narcotics issue is closely entwined with the growing insurgency, because revenue from the opium industry is believed to be used to fund the Taliban.

"We can only fight drugs in Afghanistan by the support of the international community," acting Minister of Counter Narcotics Khodaidad, a former army general, told a news conference.

"We need the international community's support, our neighbours' support, to put more money to improve our police, to improve our counter-narcotics police, to improve security resources and to block the border with our neighbours."

Japan, host of the two-day meeting of the Afghan Joint Coordination and Monitoring Board, which brings together Afghan ministers and representatives of donor countries, responded by announcing new assistance.

Of the total $110 million, $10 million will be used to aid police reform and $9 million to enhance border management, the foreign ministry said.

"The security of Kabul has deteriorated with suicide bombings and kidnapping of foreigners, and the insurgent activities in the southern part of the country could intensify at any time," Japanese Foreign Minister Masahiko Komura told the gathering.

"So as to overcome these challenges, further strengthening of the institutions of the government of Afghanistan and corresponding support from the international community are indispensable."

FRAGMENTED SUPPORT

The Afghan government estimates the number of heroin addicts in the country has swelled to 1 million, out of a total population of 31 million.

But Afghanistan's plea for more assistance comes as the United States struggles to coordinate policy with its allies in the face of rising Taliban attacks.

U.S. Defense Secretary Robert Gates is pushing for more troops in southern Afghanistan, but risks alienating allies. Canada has threatened to pull out unless other NATO countries contribute more.

Violence in Afghanistan worsened last year and more than 10,000 people, including some 300 foreign troops, have been killed in Afghanistan in the last two years, according to estimates by aid groups.

The aid community is also divided.

"Assistance is fragmented, with 62 donors, many with their own distinct security, political and development interests," Alastair Mckechnie, World Bank Country Director for Afghanistan, told the same news conference, calling for better coordination.

In its report, issued with Britain's Department for International Development (DfID), the World Bank said intensive, long-term support for Afghan farmers is key to battling opium.

Opium trade tends to flourish in remote or unstable areas, where there are few other economic opportunities, according to the report co-authored by DfID. Experts say the problem is concentrated in the south and west of the country.

Progress could be made with long-term investment in infrastructure, in irrigation of the mainly arid land and in livestock, the report said. (Additional reporting by George Nishiyama; Editing by Alex Richardson)

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