Union Home Secretary RK Singh on Tuesday congratulated the Maharashtra Anti-Terrorism Squad's (ATS) for cracking the 13/7 Mumbai blasts case.
"We are happy they (Maharashtra ATS) have cracked the case," Singh said.
He agreed that there were coordination problems between Maharashtra ATS and Delhi Police.
Singh said that the government has decided to establish the National Counter Terrorism Centre (NCTC) to improve improve coordination between the agencies.
Mumbai police's anti-terrorist squad (ATS) on Tuesday defended the two arrests in the deadly July 2011 Mumbai blasts after it appeared at odds with agencies from New Delhi, saying that investigations backed its claim of having "cracked" the case.
According to sources, the ATS believes that its investigations have uncovered a genuine dirty money trail under which they arrested 22-year-old Naquee Ahmed, who New Delhi claims has turned a police informant.
Naquee was actively involved in the Mumbai plot and the money laundering trail that preceded it, unnamed ATS sources were quoted as saying in media reports.
He also allegedly helped the mastermind Yasin Bhatkal recruit members in what is being called the Darbhanga module of the Indian Mujahideen and ferried the explosives used in the Mumbai blasts, the sources said.
The Mumbai ATS also insists that Naquee helped Bhatkal rent an apartment in south Mumbai where the conspiracy for the attack was allegedly hatched.
He allegedly provided other logistical support like helping two other men wanted in the case get jobs - one as a gym trainer, the other at a call centre.
Forensic samples have been collected from the apartment and a detailed report is awaited, the sources said.
The fervent assertions came after a day after the sheer disarray of India's security agencies came to the fore once again as the Maharashtra police unit announced that it had "cracked" the case of last year's Mumbai blasts, only to have the Centre rebuke their claims within hours.
Following a heavily detailed claim by the Mumbai police to have arrested two key suspects in the July 13, 2011 serial blasts that killed 27 people, the Union Home Ministry expressed its dismay, noting that one of the two held was an informer for the Delhi Police and the Intelligence Bureau.
At a news conference on Monday afternoon, chief of Mumbai police's ATS Rakesh Maria, told journalists that Naquee Ahmed, 22 and Nadeem Akhtar Shaikh, 23 -- both hailing from Bihar -- had been arrested.
He said that they had sought custody of a third person, Harun Naik, held by a different law enforcement body in a separate fake currency case, for allegedly providing financial support for the blasts
However, Maria's dramatic claims were soon punctured as Home Ministry officials in New Delhi countered his assertions, underscoring yet again a sensational lack of coordination among security agencies probing the terror case.
Earlier, Home Ministry officials, unwilling to be named, told reporters that they were "baffled" at the arrest of Naquee Ahmed who had apparently been helping a Delhi Police special cell and the Intelligence Bureau.
"He was the person who provided crucial leads to Waqas and Tabrez, the two bombers in the 13/7 blast," the officials were quoted as saying, referring to how the July 13 blasts are popularly known in India.
Earlier, Maria said that Indian Mujahideen (IM) co-founder Ahmed Zarar Siddibappa alias Yasin Bhatkal was the main conspirator in the triple bombings that killed 27 people and injured 107 in Mumbai, in the most deadly attack since Pakistan-based militants struck Mumbai in 2008.
"Yasin Bhatkal is the main accused in this case. He started the Darbhanga (terror) module where he held programmes to indoctrinate young boys and used them in such blasts," Maria said.
He also gave details such as how his team had visited 18 states during the investigation and had examined exactly 12,373 witnesses, adding that the financial trail of the blasts has been "fully uncovered".
"We have analysed CCTV footage of close to 180 cameras at the blast sites," Maria said, adding that a "crucial lead" in the case was obtained by the ATS in the end of November, last year.
"Success was achieved and we were able to pin point the perpetrators of the crime," Maria said.