The Islamists broke through the frontlines of the strategic district on Sunday after days of fierce clashes, tightening their grip on the volatile province of Helmand.
Fleeing local residents reported bloody gunfights as the Taliban advanced on the district centre, highlighting a worsening security situation across Afghanistan a year after NATO formally ended its combat operations.
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"Sporadic fighting is going on around the district," he said, rejecting reports of high military casualties and asserting that the district had not fallen to the Taliban.
A resident who fled Sangin told AFP that insurgents had publicly executed at least three security officials after storming government buildings.
"The Taliban dragged two intelligence officials and a local police commander from their homes and shot them dead," Haji Abdul Qader told AFP.
"Only the governor's compound and the police headquarters are under government control. The rest have been overrun by the Taliban."
Qader said he fled to the Helmand provincial capital Lashkar Gah after a mortar bomb landed on his house, wounding his infant son and daughter.
His testimony bore chilling similarities to the situation in Kunduz after the Taliban briefly captured the northern city in September -- their most spectacular victory in 14 years of war.
Highlighting the gravity of the situation in Sangin, long seen as a hornet's nest of insurgent activity, Britain today said its troops had been deployed in Helmand.
A statement from the British defence ministry did not specify the number deployed, but insisted they would play an "advisory role" and not engage in combat.
US special forces were also recently dispatched to Helmand to assist Afghan forces, a senior Western official told AFP earlier this week.
The deployments come a year after the US-led NATO coalition formally ended its combat mission in Afghanistan, adopting a training and advisory role to boost local forces.
The latest unrest in Helmand comes as President Ashraf Ghani has made a diplomatic outreach to Pakistan -- the Taliban's historic backers -- aimed at restarting peace talks with the insurgents.
Pakistan hosted a first round of negotiations in July but the talks stalled when the Taliban belatedly confirmed the death of longtime leader Mullah Omar.
A security official in Islamabad told AFP that Pakistan army chief Raheel Sharif would travel to Kabul in the coming days, in what appears to be a renewed push to jumpstart talks.
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