Military reinforcements are backing up local forces besieged by the Taliban in Sangin, the Afghanistan government has confirmed.
Fighting is continuing in the southern province of Helmand to hold off the extremist group, which has taken control of a number of strategic sites, acting defence minister Masoom Stanekzai said.
Nato military advisers, including around 10 British troops, have been deployed to support Afghan forces battling to hold the town.
Mr Stanekzai told reporters at a press conference in Kabul: "The military is in position and the operation is ongoing."
Former foreign secretary David Miliband warned that the situation was "on the verge of becoming desperate" and said Britain must be involved in bringing stability to Afghanistan.
He told BBC Radio 4's Today programme: "We are paying the price of missed opportunities in the second term of president (Hamid) Karzai from November 2009 for five years.
"I think that for Britain now - given the level of sacrifice but also the importance strategically of Afghanistan of an entry point into central Asia, as a potential expansion ground for Isis and others - I think it is important for Britain to be part of the overall strategy to stabilise the country. Above all that needs to be a political strategy."
UK soldiers were mobilised to Camp Shorabak in Helmand but will not be involved in combat operations, officials have insisted.
US Army Colonel Michael Lawhorn, a spokesman for Nato's Resolute Support mission, said its priorities were to "train, advise, assist".
"As part of the UK's ongoing contribution to Nato's Resolute Support mission, a small number of UK personnel have deployed to Camp Shorabak in Helmand province in an advisory role," he said.
"They are not deployed in a combat role and will not deploy outside the camp."