India raises security to war level as Pakistan links deteriorate

The fallout from a three-day terrorist rampage that killed at least 174 people in Mumbai threatened yesterday to unravel India's improving ties with Pakistan and prompted the resignation of India's Security Minister.

New Delhi said it was raising security to a "war level" and had no doubt of a Pakistani link to the attacks. This caused anger at home over the intelligence failure and the delayed response to the violence that paralysed India's financial capital.

Officials in Islamabad have warned any escalation would force it to divert troops to the Indian border and away from a US-led anti-militant campaign on the Afghan frontier.

Indian Prime Minister Manmohan Singh said he would boost and overhaul the nation's counter-terrorism capabilities, an announcement which came after Federal Home Minister Shivraj Patil resigned over the attacks.

"We share the hurt of the people and their sense of anger and outrage," Singh said.

"Several measures are already in place ... but clearly much more needs to be done and we are determined to take all necessary measures to overhaul the system," he said.

Air and sea security would be increased, and India's main counter-terrorist National Security Guard would be increased in size and given more regional bases, he said in a statement.

Mr Singh also named Finance Minister Palaniappan Chidambaram - much derided as Finance Minister, but respected for his work overhauling India's security agencies as a Junior Minister in the 1990s - to take over Mr Patil's job.

Mr Singh, an economist by training, will take over the finance portfolio for now, the government said.

Tension between the nuclear rivals has raised the prospect of a breakdown of peace efforts, ongoing since 2004. The two nations have fought three wars since 1947, when Muslim Pakistan was carved out of Hindu-majority India.

They went to the brink of a fourth conflict after a 2001 militant attack on the Indian parliament which New Delhi also blamed on Pakistan.

"We will increase security and strengthen it at a war level like we have never done it before," Sriprakash Jaiswal, India's Minister of State for Home Affairs, said.

"They can say what they want, but we have no doubt the terrorists had come from Pakistan," Mr Jaiswal said.

The news came as a senior Mumbai police official said yesterday that a Pakistani militant group with reported links to al Qaeda was responsible for the terrorist attacks that left at least 174 people dead.

Rakesh Maria, joint crime police commissioner, said the attackers were from "a hardcore group in the Lashkar-e-Taiba (LeT)".

The group has long been seen as a creation of the Pakistani intelligence service to help wage its clandestine war against India in the disputed Kashmir region.

Earlier, a US counter-terrorism official said some "signatures of the attack" were consistent with Lashkar and another group that has operated in Kashmir.

Both are reported to be linked to al Qaeda.

The cabinet shuffling came as a chorus of criticism about the government's handling of the Mumbai attacks grew louder.

"Our politicians fiddle as innocents die," read one newspaper headline yesterday.

In Britain, Home Secretary Jacqui Smith said the nation must reassess its ability to respond to terrorists attacks in the wake of the massacre.

Ms Smith said security forces in the UK should review "what lessons need to be learnt".

Her comments followed suggestions from a former SAS head and the chairman of the Commons Counter-terrorism Committee that Britain would be ill-prepared to cope with a similar assault.

A day after the siege ended, authorities were still removing victims bodies from the Taj Mahal Palace Hotel, where three suspected Muslim militants made a last stand before Indian commandos killed them in a blaze of gunfire and explosions.

Yesterday, the waterfront landmark, popular among foreign tourists and Indian high society, was surrounded by metal barricades, its shattered windows boarded over.

At the famous Gateway of India basalt arch nearby, a shrine of candles, flowers and messages commemorated victims.

The rampage was carried out by gunmen at 10 sites across Mumbai starting on Wednesday night.

The death toll was revised down yesterday, from 195, after authorities said some bodies were counted twice. However, it is feared the toll could rise again as areas of the Taj Mahal were still being searched.

Among the dead were 18 foreigners, including British nationals and Rabbi Gavriel Holtzberg who, along with his wife, Rivkah were killed in an attack on the Jewish Chabad-Lubavitch movement's centre in Mumbai. Nine gunmen were also killed.

A previously unknown Muslim group called Deccan Mujahideen, a name suggesting origins inside India, claimed responsibility for the attacks. But Indian officials said the sole surviving gunman, now in custody, was from Pakistan. Pakistan denied it was involved and demanded evidence.

In the wake of the attacks, the Indian prime minister has now opened cross-party talks on setting up a federal agency of investigation. Questions have also been asked about India's failure to pre-empt the attacks and the time taken to eliminate the gunmen.

But JK Dutt, director general of India's elite commandos, brushed off criticism that his unit, which had to fly from New Delhi to Mumbai, was slow to respond. "There was no delay," he said.

Authorities say the gunmen may have arrived in Mumbai on a trawler found drifting off the coast a day after the attacks started.