Anguish of the aid agencies

Aid workers were reviewing their operations in Afghanistan last night after 10 members of a medical team, including a British doctor, were killed, prompting fears that Taliban gains in the previously calm north could hit programmes and allow corruption to flourish.

The British Government is expected to review whether it is safe for any of its own civilian staff to work outside the main cities after the shooting dead of Dr Karen Woo, 36, and nine colleagues in the forest of Badakhshan, according to Whitehall sources.

The Taliban claimed that the victims were spying for the US and trying to convert Muslims to Christianity. The claim was angrily denied yesterday by Dr Woo's family who described her as a "true hero" whose motivation was to help Afghans without medical care. Dr Woo had written in a recent blog posting that she would act as the team doctor and run a mother-and-child clinic in Nuristan.

The expedition was run by the Christian charity International Assistance Mission, which also denied the Taliban claims. "The accusation is completely baseless; they were not carrying any Bibles except maybe their personal Bibles," said Dirk Frans, the executive director.

Dr Woo's body, and those of the other victims – six Americans, a German and two Afghans – were flown back to Kabul yesterday. Her fiancé, who was due to marry her in Britain in two weeks, identified her body in a city morgue.

The medics were heading back to Kabul when they were intercepted by gunmen. According to the sole survivor, an Afghan, the group was robbed, then lined up and shot.

Officials fear that restrictions on civilian work in the north will hinder efforts to ensure that the millions of pounds in aid is not being wasted through corruption and incompetence.

Aid work has focused on the north of Afghanistan since violence in other parts of the country has made it impossible to operate there.

The Foreign Office and Department for International Development stepped up their efforts to oversee aid funding after parliamentary committees accused the officials of failing to supervise projects, leading to widespread mismanagement and fraud. The civilians hired to oversee the projects are protected by private security firms.

However, an official involved in organising security for UK government staff, said: "We carry out reviews of security after an incident such as the one which has just taken place.

"I appreciate that those who were killed appear not to have any security but it did take place in an area which was thought to be relatively safe and under the circumstances it seems very likely that there will be a review of the movements of our people and safeguards put in if necessary. I suspect this will happen, if only in the short term."

Nato is understood to be concerned about inroads the Taliban are making in Badakhshan, as well as neighbouring Takhar province.

The sharp decline in security in northern Afghanistan is one of the most dramatic trends of the war yet has been largely under-reported, with far more attention falling on the country's south and east where Nato's resources are concentrated.

Security analysts in Kabul said that no NGOs had so far decided to pull out of Badakhshan because of the murders.

The growth of the insurgency here may spell trouble for Nato plans to transfer security of some of Afghanistan's safer provinces to Afghan government control.

Violence in Afghanistan is at its worst since US-led and Afghan armed groups overthrew the Taliban in 2001.

June was the bloodiest month of the war for foreign forces in Afghanistan, with more than 100 killed.