The disclosure that the gunmen were not sent from the war-torn republic of Chechnya but belonged to a group from Kabardino-Balkaria, the Russian republic of which Nalchik is the capital, will be of great concern to the Kremlin.

It provides alarming evidence that far from dying down — as claimed by President Vladimir Putin — the bloody Chechen conflict is spreading.

“Most of the militants who were killed and those caught alive are local,” said an officer with the Nalchik anti-terrorism police unit. “ The ferocity of the attacks has shocked the city.”

The onslaught, which turned the town of 280,000 into a war zone, was the most daring raid by pro-Chechen Islamic militants since last year’s Beslan school siege in which 330 hostages were killed. It came less than a month before parliamentary elections in Chechnya, hailed by Putin as evidence that the region is becoming stable.

The 24 hours of gun battles in which several police stations and other security forces buildings were attacked left at least 108 dead, including more than 60 militants. Nearly 30 others were detained.

Most of the gunmen were thought to be members of Yarmuk, a homegrown fundamentalist group that the local authorities twice claimed to have destroyed.

Composed mainly of young extremists from the region’s two main ethnic groups, the Kabardins and the Balkars, Yarmuk has close ties with Shamil Basayev, Russia’s most wanted terrorist, who was behind the Beslan attack and appears to be extending his influence in an attempt to open up a new front in his war with Moscow.

Last week Russian prosecutors blamed Anzor Astemirov, a radical Yarmuk leader with ties to Basayev, for the Nalchik attacks. Local officials claimed they were launched to rescue a group of extremists surrounded by security forces. But the assault on the city appeared too well organised to be spontaneous. Observers believe it was a suicide mission with the aim of killing scores of officers and embarrassing the authorities.

Security forces were caught off guard when about 100 militants armed with AK47s, hand grenades and rocket launchers turned up in the city centre.

In near-simultaneous attacks shortly after 9am on Thursday, the militants targeted three police stations, the headquarters of the local FSB (the former KGB), the interior ministry building, the offices of the city’s prison guards, a military unit guarding the airport and a counter-terrorism centre.

“Suddenly a car pulled up outside the FSB building,” said Evgenia Sakurova, the director of a hotel opposite.

“Five or six armed men jumped out and ran towards the FSB entrance. They were carrying rucksacks. Quickly they took them off and threw them at the main doors. Explosions followed and all the windows on the ground and first floors were blown out. But the terrorists didn’t manage to break into the building and officers started shooting at them from inside.”

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