Among the new measures, the government will move to create a national investigative agency, beef up coastal security forces, better train local police and strengthen anti-terror laws, said Home Minister Palaniappan Chidambaram, the country's top law enforcement official.

"Given the nature of the threat, we can't go back to business as usual," Chidambaram said in a speech to India's Parliament, adding he would "take certain hard decisions to prepare the country and people to face the challenge of terrorism."

The shake-up represents the government's first detailed response to widespread public anger over security and intelligence failures in the attacks. Chidambaram has previously apologized for government "lapses" in the assault.

Meanwhile, police in Mumbai backed off of plans to produce the only surviving attacker, Mohammed Ajmal Kasab, in court Thursday for a routine hearing, citing security concerns.

Instead, a magistrate came to police headquarters and granted authorities permission to hold Kasab for a further two weeks, public prosecutor Eknath Dhamal said.

A security cordon was thrown around the downtown Mumbai building where Kasab was being held, and journalists were kept 200 yards (meters) away, their view blocked by a police van.Kasab, who was wounded and captured by police in the first hours of the Nov. 26 attack, has been repeatedly interrogated by authorities and reportedly offered key details about the planning of the assault and those responsible for it.

Many lawyers across the city, horrified by the attacks, have said they would not represent Kasab. On Thursday, Dinesh Mota, a lawyer asked by the court to defend Kasab, said he would refuse.

"I will not represent him, it is against all human values," he said.

On Wednesday, police said the Pakistani-based militant group blamed for the Mumbai attacks kept an Indian militant as a "point man" to shepherd gunmen across India's porous borders to stage attacks.

Sabauddin Ahmed, accused of managing militant safe houses in Nepal, was being brought to Mumbai for questioning in last month's attacks that left 171 dead. Ahmed was arrested in February following a deadly raid on an Indian police station.

Ahmed's position in Nepal extends the reach of Lashkar-e-Taiba, the group investigators blame for the Mumbai siege, and could represent another blow to Indian officials who say Pakistan-based militants were entirely responsible.

"He was their main point man in Katmandu, a very trusted man by Lashkar," Amitabh Yash, director of the police task force that arrested Ahmed, said.

Also Wednesday, a U.N. Security Council panel declared Jamaat-ud-Dawa a terrorist organization, subject to U.N. sanctions, as sought by India and the U.S. It specifically designated four men connected to Jamaat-ud-Dawa and Lashkar as terrorists, including Zaki-ur-Rehman Lakhvi, the suspected mastermind of the attacks.