Taliban co-founder Mullah Baradar will lead a new Afghan government that could be announced soon, sources in the Islamist group said on Friday, as it battled rebel fighters while striving to ward off economic collapse.

Baradar, who heads the Taliban's political office, will be joined by Mullah Mohammad Yaqoob, the son of late Taliban founder Mullah Omar, and Sher Mohammad Abbas Stanekzai, in senior positions in the government, three sources said.

"All the top leaders have arrived in Kabul, where preparations are in final stages to announce the new government," one Taliban official told Reuters, on condition of anonymity.

The Taliban, which...