ISLAMABAD - The targeted operation against militants in Karachi, Pakistan's financial hub, is likely to grow into a large-scale campaign in the coming days after the BBC report that Altaf Hussain-led Muttahida Qaumi Movement (MQM) has been receiving funding from India.

The BBC report, according to analysts and government officials, may become a 'licence' for the government to go ruthless and wipe out the alleged militant-wing of the MQM.

The report revealed that MQM leaders told the UK authorities they received Indian government funds. UK authorities investigating the MQM for alleged money laundering also found a list of weapons in an MQM property.

The report by Owen Bennet Jones, quoting a Pakistan official, claimed that India has trained hundreds of MQM militants over the last 10 years. The BBC closed its Karachi office and staffers were asked to move to Islamabad for their protection.

"The operation is on and we need to catch the traitors. We never targeted the MQM and will not do so now. We are against those who are conspiring against our country", a senior cabinet member told The Nation.

"It is the job of the government to catch the traitors and those living on illegal funding from India. The operation may be expanded but will of course remain targeted", he asserted.

The minister said the government does not want to damage the MQM as a political party but "those who claim to be MQM members and seek help from abroad" will not be spared.

The MQM is not too concerned with the development. Party spokesman Wasay Jalil twitted, "We have seen these confessions since 1992 so no worries. It's a very old allegation with nothing new in it".

Taking to his twitter, another MQM lawmaker, Ali Raza Abidi, said, "All those ready to believe the BBC report, must also believe what they have written about the ISI (Inter-Services Intelligence), Pak(istan) Army, Benazir (Bhutto), Playboy IK (Imran Khan) (and) NS (Nawaz Sharif)".

A former MQM activist, Saulat Mirza, who was executed recently, had also accused MQM of having links with India's intelligence agency Research and Analysis Wing (RAW). His statement had led to postponement of his hanging a few times until the investigators completed recording of his statements paving the way for his execution. Last month military's top brass had accused RAW of supporting terrorism in Pakistan. This was followed by a war of words between the two countries.

In April then Malir Senior Superintendent Police (SSP) Rao Anwaar alleged that MQM was backed by the RAW. Anwaar claimed that the 'MQM militants' were trained by the Indian agency.

The police officer had announced the arrest of two terror suspects, Tahir alias Lamba and Mama Junaid, who, he claimed, were MQM members "trained by RAW".

"MQM is spreading terror in the guise of a political party and all the senior leaders of MQM, including its chief Altaf Hussain, are involved in spreading terror in the country. MQM is a terrorist organisation and it should be banned the way Tehrik-e-Taliban Pakistan (TTP) and other militant outfits are on the basis of their terrorist activities", Anwaar argued.

He charged that members of MQM went to India through foreign countries, trained there by RAW and then brought back to Pakistan to "spread terror" via Kashmir. He was transferred soon after addressing the controversial news conference.

The MQM has been under pressure since March when the security forces raided the party's headquarters in Karachi. They claimed to have found a significant number of weapons there. The MQM said they were planted. As well as its electoral base, the MQM has formidable street power. When it orders a strike the streets go empty and the whole of Karachi grinds to a halt.

MQM supreme leader Altaf Hussain has lived in self-imposed exile in the UK for more than 20 years. He was given a British passport in 2002. For many years the party has been accused of using violence to impose its will in Karachi.

A number of MQM members, including Altaf Hussain, have been arrested in relation to the money-laundering case but no one has been charged. The party insists that all its funds are legitimate and that most of them come from donors in the business community in Karachi.

India has long accused Pakistani officials of involvement in sponsoring militant attacks in India. New Delhi, for example, has demanded that Pakistan take firmer action against those suspected of plotting and managing the Mumbai attacks of 2008. Defence analyst Dr Mohammed Khan said, "It is very rare that crops commanders discuss the role of RAW. If the meeting of senior military officials had discussed the involvement of RAW in Pakistan (last month), it means our security agencies have strong proofs of India's involvement in Pakistan". "I am sure our security agencies will launch operation against terrorists and their facilitators. The military has decided to curb Indian involvement by targeted operations".

He added, "The internal coordination between different law enforcement agencies would be helpful to eliminate the foreign hand in conspiracies against us".

International affairs expert Dr Zafar Nawaz Jaspal said, "India's involvement in Pakistan to support terrorist and sabotage activities is not a new thing". He said, "India has long been involved in such activities that are designed at destabilizing Pakistan. Now, we have got clear evidence that RAW is behind all kinds of terrorist activities in Pakistan".

MQM leader Abdul Rashid Godil said, "They can't eliminate MQM through operations. We have faced this before and we will come out of it now". The MQM lawmaker said his party was not afraid of any operation and does not care about going to jails. Sources close to the decision makers said the civil and the military leadership will soon discuss the option of a large-scale operation in Karachi and other areas to nab the "RAW-funded terrorists".

However, a large-scale operation in Karachi can be damaging for the economy as the city is referred as the financial capital of Pakistan. Karachi generates approximately 53.38% of the total collections of the Federal Board of Revenue (FBR), out of which 53.33% are customs duty and sales tax on imports.