The US Army has suspended a huge contract with a munitions dealer who was supplying the Afghanistan government with decades-old ammunition from the old communist bloc and gun cartridges manufactured in China, the New York Times reported Thursday in a lengthy investigative report.

The company, AEY Inc, was run by a 22-year-old man and had a vice president who was a masseur, the newspaper reported.

With the federal contract, awarded last January and worth as much as $300 million, AEY became the main supplier of munitions to Afghanistan's army and police forces.

Much of the ammunition was from ageing stockpiles, including those deemed by the State Department as unreliable and obsolete.

AEY's contract was suspended after the Times inquired repeatedly about it with the army.