Indian Prime Minister Manmohan Singh said on Thursday that the attacks in Mumbai which killed more than 100 people were probably plotted by a group based in a neighbouring country.

Indian governments often blame neighbouring Pakistan or sometimes Bangladesh for supporting or harbouring militant groups which have launched attacks on Indian soil.

Singh said that would "take up strongly" the use of neighbours' territory to launch attacks on India.

"The well-planned and well-orchestrated attacks, probably with external linkages, were intended to create a sense of terror by choosing high-profile targets," Singh said in an address to the nation.

Singh was speaking as commandos battled militants in the Taj Hotel and the Trident-Oberoi in Mumbai, where scores of people were trapped or taken hostage.

"We will take up strongly with our neighbours that the use of their territory for launching attacks on us will not be tolerated and there will be a cost if suitable measures are not taken by them," Singh said.

"It is evident that the group that carried these attacks, based outside the country, had come with single-minded determination to create havoc in the commercial capital of the country," Singh said.