Leopold Café, the backpacker bar that became a scene of carnage when two gunmen sprayed it with automatic fire on Wednesday, was back in business yesterday - just 24 hours after the deadly terror strikes on Mumbai finally ended.

“I just wanted to show my support. I didn’t know I’d be the first,” Mr Sharif, 39, the first customer, said, holding a glass of Carlsberg beer while his six-year-old son Ali sipped at a coke. “People should know we are not afraid.”

Behind him, a bullet hole gaped in the wood panelling, a chilling reminder of the moment when two terrorists stepped up to the café’s open facade and began firing indiscriminately. It is thought ten people died at the eatery, known locally for its greasy snacks and blaring music and made a world-famous attraction by Shantaram, the best-selling novel by Gregory David Roberts.

The demonstration of Mumbai’s resilience was tempered, however, by mounting anger that a small band of terrorists had once again been allowed to paralyse India’s commercial capital, and to slaughter at least 174 people. “You can’t just think that we’ll bounce back and that’s it,” Mr Ali said. “Someone has to be accountable. Enough is enough.”

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That same anger was boiling over outside the bullet-scarred Taj Mahal Hotel, where hundreds of protestors gathered to criticise the government’s response to the worst terror strike to hit India in 15 years. “It took more than eight hours for specially-trained commandos to make the two-hour journey from Delhi,” Om Prakash, a local business man said. “The government must think we are stupid.”

More funerals of victims were held across India yesterday. In south Mumbai last night there a candlelight vigil to remember the dead.

Many more Mumbaikers were still numb with fear at the prospect of further violence. The police claimed yesterday that there were just 10 terrorists. Earlier reports had put the number at 25. Last night, much of Mumbai was terrified that several-heavily armed, suicidal gunmen could still be on the loose.

But there were also indications of a city getting back on its feet. The honking of car horns began again, after days when the streets had been deserted. Street-side fruit sellers, their stalls piled high with scarlet strawberries, were doing brisk trade. “You think we can afford to shut?” asked one.

In popular cafés, middle-class families were queuing for tables. When they found a seat, however, there was only one topic of conversation – the attacks: who had been killed; how many children had been orphaned; who was to blame. “Nearly everybody in the congregation knows somebody who has died,” said Rev Avinash Rangayya, the pastor of All Saints church in south Mumbai.

A short distance away from Leopold’s, Shankar, a 23-year-old street hawker who sells balloons in the lanes around the Taj Mahal Palace, one of the two luxury hotels that were stormed by terrorists, was adamant that last week’s strikes will haunt Mumbai for years.

“I sell to tourists. I don’t think they will want to come to Mumbai now,” he said, standing with his back to the Taj. Inside the building, Indian troops were still searching for booby traps. Grenades had been left in the mouths of some of the dead bodies, a policeman said.

“Soldiers and terrorists don’t buy balloons,” Shankar said. “This attack will make us all poorer. It is against me; against Mumbai; against all of India.”

The Wall Street Journal agreed with the street trader. The strikes – and the sluggish response of India’s authorities -- would “hasten the unravelling of this city’s lofty dreams to become an international financial capital,” it said.

Behind Shankar, other hawkers were asleep, in streets that usually throng with foreign visitors – an early indication of the crisis analysts now expect to hit India’s tourism industry. Above, the sky was clouded when it should have been bright blue – a result of the unseasonal cyclone was approaching Mumbai over the weekend.

The change in the weather was apt: even before the terror strikes, Mumbai was being buffeted by a financial storm.

The city’s stock market, which was forced to close on Thursday leaving Mumbai’s business district deserted, has fallen by 60 per cent in the wake of the global credit crisis. Calls to suicide help-lines have risen by 60 per cent in the past three months, the services inundated with cries for help from middle-class Indian family men who have lost everything.

In short: if the gunmen were looking for soft targets – hotels, hospitals, train stations, a bar – they also found one in the form of the Indian economy.

Ajay Sahni, executive director of the Institute of Conflict Management, said: “The idea of 8 per cent economic growth, of India shining, becoming an economic superpower – you can forget it until the security system is comprehensively overhauled.”

Among the British business community, however, there was a determination not to be cowed and that Mumbai – like London, New York and Madrid before it – would recover.

Alan Rosling, a Briton who is an executive director of Tata Sons, the Indian conglomerate, and chairman of the British Business Group in Mumbai, said the city’s British business community would not be bullied. The group was due to meet this week in the Oberoi, one of the hotels that was turned into a killing field. It will meet in a members’ house instead. “If London can put up with 20 years of the IRA then Mumbai can damn well weather this,” Mr Rosling said.

Indian Hotels, the company that owns the Taj Mahal Palace, believes likewise. It has already pledged to rebuild the iconic structure, “inch by inch”.

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