Shocked by the attacks in Mumbai, Prime Minister Manmohan Singh said on Thursday that the government would invoke the National Security Act, set up a Federal Investigation Agency and tighten the laws to deal with terrorism effectively.

Addressing the nation in an extraordinary step, he said the terrorist group responsible for the carnage in Mumbai was "based outside the country" and promised to choke the infiltration lines and funds to ensure that such elements pay a "heavy price" for such "cowardly and horrific" acts.

Talking tough, Singh said India will not tolerate the use of territories of its neighbours for launching attacks here and there would be a "cost" if suitable measures are not taken by them.

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

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

He asserted that "strongest possible measures" would be taken to deal with such elements, including the use of the National Security Act and setting up of a Federal Investigation Agency to prevent such incidents.

While the National Security Act would be used to deal with situations of this kind, existing laws would be tightened to ensure that there were no loopholes available to terrorists to escape the clutches of the law, he said.

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