Police arrested a third suspect yesterday over the gang-rape and killing of two teenage cousins found hanging from a tree in northern India.

Three suspected attackers have been detained, along with two policemen accused of dereliction of duty and criminal conspiracy.

The latest arrest came as Uttar Pradesh chief minister, Akhilesh Yadav, said he was recommending a federal investigation into a case that has triggered national outrage.

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The three suspects detained over the attack in Uttar Pradesh state are cousins in their twenties from an extended family. They face murder and rape charges, crimes punishable by the death penalty, said police. Two other suspects from the same village are also being sought.

India has a long history of tolerating sexual violence, but the gang-rape and killing of the girls aged 14 and 15 - which was followed by TV footage showing their corpses swaying as they hung from a mango tree - caused national outrage. The father who reported the girls missing, Sohan Lal, has demanded a federal investigation.

"I don't expect justice from the state government as state police officers shielded the suspects," said Lal, a poor farm labourer who refused a payment of 500,000 rupees (£5000) from the state government as financial help. He told reporters he would accept no financial assistance until the Central Bureau of Investigation takes over the case.

Such government payments are common in India when poor families face high-profile calamities, and this refusal by a man living in desperate poverty is likely to focus attention on his demands for a federal investigation.

With pressure mounting on the state government to act swiftly, Yadav said he was recommending to the federal government that the Central Bureau of Investigation should probe the crime. Under Indian law, a state can only make a recommendation; it is up to the federal government to ask the CBI to investigate.

Rahul Gandhi, a leader of the opposition Congress party, visited the families of the two girls yesterday and endorsed the demand for a federal investigation.

Dozens of members of the All India Democratic Women's Association marched yesterday through the streets of New Delhi, India's capital, demanding the immediate arrest of the two fugitive suspects and justice for the victims.

"Enough is enough. Women will not tolerate such atrocities any longer," the protesters chanted, asking authorities to take crimes against women seriously.

Uttar Pradesh officials initially appeared caught off guard by the reaction to the attack. Ashish Gupta, a state inspector-general of police, pointed out to journalists that 10 rapes are reported each day in Uttar Pradesh, which has 200 million people. Gupta said 60% of such crimes happen when women go into the fields because their homes have no toilets.

The girls in the latest incident were attacked in the tiny village of Katra, about 180 miles from Lucknow. They disappeared on Tuesday night after going into fields near their home.

Lal went to police to report them missing, but he said they refused to help. That infuriated his neighbours, who, once the bodies were found, refused to let them be taken down from the tree until the first arrests were made.

The girls were Dalits, from the community once known as "untouchables" in India's caste system. The fired policemen and the men accused in the attack are Yadavs, a low-caste community that dominates that part of Uttar Pradesh.