The North Korean vessel was suspected to be carrying missile-manufacturing machinery to Pakistan.

Intelligence agencies do not rule out a link between the two and said while one of the boats was grounded off the Worli coast, the other was sunk off Colaba.

Though the nature of the consignment loaded onto the boats is still not clear, it is feared that they were laden with arms and ammunition provided by the ISI and trans-shipped to speedboats during the last week of June.

The matter came to light after Customs officials and some officers attached to the Intelligence Bureau lodged a complaint at the Yellow Gate police station on July 1. A red alert was sounded and a search launched for the missing boats, police said.

Investigating officer police sub-inspector Arjun Chindhe toldThe Indian Express that some police boats were despatched to the area off Sprong Lighthouse where one of the vessels is suspected to have been grounded, and a search carried out. The wreckage has not been located so far, Chindhe said. ``A thorough search for the mysterious wreckage will be carried out by the Navy,'' Chindhe added.

However, intelligence sources fear the speedboats were abandoned after the landings, and were sunk to destroy evidence. While one vessel has been grounded in deep waters off the Worli coast and its recovery seems highly unlikely, the boat sunk off Colaba has been cut into pieces and some of the spares sold as far as the Mora Port near Uran.

Intelligence reports on the vessels assume significance in the light of the red alert sounded by the Government along the city's coastline. Surveillance along the coast has been stepped up after agenceis received information about the mysterious boats.

Police have got together residents of hundreds of villages along the State's 750km coastline to form a vigilance group, the `Sagar Suraksha Dal', in the wake of intelligence agencies sounding a fresh alert regarding a large-scale arms landing in view of the ongoing conflict with Pakistan. Dal members are required to coordinate with agencies like the police, Coast Guard and Navy.

The formation of the Dal is based on reports that some large speedboats have been trying to slip into the coast during the past three weeks. Some of the vessels were spotted as close as Dahanu in Thane district, sources added.

The alert, sources said, comes in the wake of news about some Pakistani speedboats trying to sneak into Indian waters off the Kutch, Miyani, Jawar, Porbunder and Jamnagar coasts in Gujarat, but the attempts were foiled by the strong presence of the Coast Guard and Navy in the area. Aerial surveillance by the agencies has further ruined insurgents' attempts, sources added.