Abdul Karim Tunda, who was arrested Friday by Delhi Police from the India-Nepal border, was in direct contact with Hamid Gul, a retired lieutenant general of the Pakistan Army and former spymaster who was head of the Inter-Services Intelligence (ISI) agency, police said. But, Gul denied Tunda's allegation.
"Tunda was directly in touch with former ISI chief Hamid Gul," a police officer said.
Tunda first met with Gul in 1995 and was in regular touch with him till the end. Gul was director general of the ISI during 1987-89.
Police said that besides Gul, Tunda, who is in police custody, was also in touch with other ISI's officials who were instructing him to operate in India as he was well aware about the Indian soil.
"Lashkar-e-Taiba is one of the Tanzeems (armed organizations) functioning under the ISI," said the officer.
Interrogators said that Tunda met Gul as well as Mumbai underworld don Dawood Ibrahim, more than six to seven times after 2000, and Hafiz Saeed, chief of Jamaat-ud-Dawa. But was not able to give exact details about his meetings with Saeed.
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But speaking to a news channel Gul denied the allegation made by Tunda.
"I don't know him. The man is a phony. Don't waste time on him. I have no idea why he is naming me and giving my connection with Dawood Ibrahim etc ... It is totally wrong," Gul told TimesNow channel.
"I am hearing this Tunda name ... which is so strange," said Gul.
Delhi Police said Tunda has also told investigators that he was in touch with the ISI agents who were operating in India in the fake currency racket.
"He recognised a few names," an investigator told IANS.
Police said, Tunda, an expert in bomb formation, was also involved in circulation of fake currency in India.
"He made frequent visits to Bangladesh and Nepal for indoctrinating the Muslim youths for jehad. He also visited many middle east countries," said the officer.
Tunda, 70, was arrested by the Delhi police Special cell Aug 16 from Nepal border. He was coming from Bangladesh. Police claimed he was involved in more than 40 bombing cases across India.