The 1993 Mumbai blasts were organised by Dawood Ibrahim under pressure from the Inter-Services Intelligence of Pakistan, according to official sources in New Delhi.

The ISI, which controlled the shipping routes from the Gulf to India's west coast, demanded that the mafia transport weapons and explosives into India in return for the use of Pakistani waters, the sources said quoting official information.

The Mumbai underworld's financial interests were under pressure as gold prices had crashed and the smuggling routes between the Gulf nations and the western coast of India had come under ISI control.

The ISI contacted Dawood through two Pakistani smugglers, who told him the conditions for allowing him to continue smuggling activities.

Initially Dawood resisted, but after the communal riots in Mumbai in 1992-93 he endorsed the idea of the blasts in the second week of January 1993. The explosives arrived within a fortnight and the blasts carried out on March 12, the sources said.

The ISI even now continues to use Dawood's group -- known as the D-company -- to further it anti-India activities, the sources said.

The sources claimed that the D-company, at the behest of the ISI, had planned to arrange explosions in air-conditioned coaches of two trains in the first week of January this year.

The ISI also used the hawala channels used by D-company for financing illegal activities in India.

Dubai-based Dawood associates and a suspected ISI agent used these channels to send fake currency to India through unsuspecting Indian expatriates.

The channels, the sources said, were also being used to fund contract killers, agents, informers, police and jail officials, besides to compensate the families of their associates killed by the police.

Pakistan gave asylum to Dawood after the 1993 blasts. Besides Pakistan, the underworld don has investments in at least 15 large firms and offices in Europe, Africa, the UAE, Southeast Asia. He also has benami properties in India.