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She admits meeting Colonel Purohit, but says that he could not have been a member of Abhinav Bharat because army officers are forbidden from joining political organisations.
"It's a political conspiracy, led by the Congress," she told The Times.
Her group is regarded as one of the more radical in the Hindu nationalist movement, which also includes the Bharatiya Janata Party — India's main opposition party.
The BJP, anxious not to undermine its own anti-terror platform, initially distanced itself from Colonel Purohit and the other Malegaon suspects.
But in the past two days, it has defended and offered legal support to Sadhvi Pragya Thakur, a Hindu holy woman who is also among those arrested.
"Whoever is connected with cultural nationalism and Bharatiyata [Indian-ness] cannot be a terrorist," said Rajnath Singh, the BJP chief, who has been photographed with the Sadhvi (the female equivalent of a Sadhu, or Hindu monk).
"Without sufficient evidence there is no reason to term Pragya Thakur a terrorist,'' he said.
Secular parties point to this as further evidence justifying a ban on Hindu nationalist groups they say were behind violence that killed at least 60 Christians in the eastern state of Orissa this year.
The Government has so far shied away from a ban, fearing that it would provoke a backlash from other radicals and rally support for the BJP ahead of national elections, due by May.
The concern now is that Colonel Purohit's arrest will damage the reputation of the Army, which is generally seen as apolitical and is often deployed to quell communal violence.
"This incident is a matter of serious concern for all of us. We are very determined to go to the root of the whole thing," said A.K. Antony, the Defence Minister. "We are waiting for a report from the Maharashtra police and I can tell you, we are taking it seriously."
Lieutenant General S. P. S. Dhillon, the Deputy Army Chief, said: "The Indian Army's prestige has been hurt after our officer's name came up in the Malegaon blast case."
He called Colonel Purohit's case "a freak incident".
However, military and terrorism experts said they expected that he was probably just one of several Hindu extremists within the ranks of the Army, which will now have to overhaul its internal monitoring systems.
"There's been a process of political radicalisation going on for some time," said Dr Ajay Sahni, executive director of the Institute for Conflict Management.
"At some level a handful of people in the army will have become infected. As far as the institution of the army is concerned there is no danger of radicalisation — army traditions are far too strong. But there will be the odd bad egg."
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