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Updated at 21.00 GMT (02.30 Bombay)

Indian commandos fought Islamic militants for control of two Bombay hotels tonight to save dozens of foreigners trapped or being held hostage inside. Guests and workers rescued from the hotels said that bodies were littering the corridors, suggesting that the final death toll from the al-Qaeda-style terror attacks could continue to climb.

It emerged this evening that Andreas Liveras, a British shipping magnate, was among the dead. The businessman, who featured on this year's Sunday Times Rich List, had earlier given an interview to the BBC saying he was trapped with a big group hiding in the basement of his hotel.

As the country's Prime Minister blamed forces "outside the country" for last night's co-ordinated attacks, the Indian Navy boarded and searched a cargo ship recently arrived off Bombay from Pakistan.

Police said 125 people have been killed in the attacks, including at least six foreigners. The Foreign and Commonwealth office confirmed today that a British national was among them.

The gunmen slipped into the city on two small boats last night, mooring near the Gateway of India monument before fanning out across the southern part of India's financial capital. Carrying assault rifles, hand grenades and explosives, they hit targets including a hospital and a bar popular with backpackers and tourists.

They also stormed the city's two most famous luxury hotels, including the landmark Taj Mahal Palace that is a favourite watering spot for the elite of Bombay and Bollywood. Witnesses said that they tried to find British and American visitors to take hostage.

The latest injury toll stands at 327, including seven Britons. Among the foreigners killed were an Australian, a Japanese and an Italian.

Mr Liveras, 73, the British victim, was in the Taj hotel’s restaurant when the attacks began.

“As soon as we sat at the table we heard the machine gun fire outside in the corridor," he said in an interview from his mobile phone shortly before he died.

"We hid ourselves under the table and then they switched all the lights off. But the machine guns kept going and they took us into the kitchen, and from there into a basement, before we came up into a salon where we are now.

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