Indian officials accuse London of failing to act against these businessmen, who use fake charities to transfer up to eight million pounds a year to terrorist outfits operating in Kashmir, such as the Lashkar e Tayiba, the report said.

At a meeting with British Prime Minister Tony Blair [Images] at the G8 summit in St Petersburg [Images] on Sunday, Indian Prime Minister Manmohan Singh [Images] reminded him that 'India had handed over a detailed dossier three years ago identifying 14 men living in Britain and was assured the suspects would be investigated.'

`Since then nothing has been done, and the money still coming from Britain helps to pay for the terrorist camps where we believe the bombers were trained and this atrocity was planned,' the Times quoted a senior Indian security official as saying.

Chancellor of the Exchequer Gordon Brown pledged that the Treasury would use new laws to shut down terrorist fundraising and ordered that the bank accounts of 54 organisations be frozen, although records show that last year Whitehall only recovered �9,318, the article said.

'Britain talks about the need for all nations to get tough together, but more money comes from the UK to Kashmiri terror groups than any other country,' the Indian official was quoted as saying.

According to the article, 'One of those identified in the dossier is reported to be a Pakistan-born multimillionaire businessman who owns at least two luxury homes in London.'

'The funding from overseas has helped terror groups to set up a string of new training camps in Bangladesh, close to the border with India. Al-Qaeda-trained militants are reportedly running up to 13 camps, and MI6 and other Western intelligence agencies have been monitoring the traffic of young recruits to these centres including a number of volunteers based in Britain,' said the Times.

British security agencies, the article said, 'had been warning that groups closely linked to al-Qaeda were planning to stage bomb attacks in India, using local sympathisers to carry out their operation. Scores of India-based militants are alleged to have attended the al-Qaeda run camps near Bandarban and Chittagong in Bangladesh. Security chiefs believe that the mastermind behind the bombing on seven commuter trains used one of these camps in Bangladesh to finalise plans for the attack.'

The article then noted that Indian anti-terrorist officers 'travelled to Tripura yesterday to question 11 men from the port city who were said to have been caught trying to cross back into Bangladesh. The men are believed to be militant members of the outlawed SIMI (Student Islamic Movement of India), which police allege helped in the bomb plot.'

The Mumbai blasts: complete coverage