NEW DELHI (AFP) - India said Thursday that a Pakistan court's decision to grant bail to the alleged mastermind of 2008 terror attacks in Mumbai was unacceptable and demanded immediate steps to reverse the decision.

Zaki-ur-Rehman Lakhvi is accused of planning the 60-hour siege on India's economic capital that left 166 people dead and was blamed on the banned Pakistani militant group Lashkar-e-Taiba (LeT).

Indian foreign ministry spokesman Syed Akbaruddin said the decision to grant bail to Lakhvi was "a reassurance to terrorists who perpetuate heinous crimes".

"We cannot accept that LeT's chief operations commander, Lakhvi, one of the key conspirators of the Mumbai terror attacks... a person designated as international terrorist by UN security council, is released on bail," Akbaruddin said.

"We call upon Pakistan to immediately take steps to reverse this decision," he told journalists in Delhi.

Indian Home Minister Rajnath Singh reiterated that demand, saying the decision to grant Lakhvi bail was "very unfortunate".

The pace of prosecutions has been a major irritant in already strained relations between the two nuclear-armed rivals.

As well as Lakhvi, Pakistan has had another four Mumbai terror suspects in its custody since the attacks.

New Delhi has long said there is evidence that "official agencies" in Pakistan were involved in plotting the attack.

Islamabad denies the charge, but LeT's charitable arm Jamaat-ud-Dawa (JuD), seen as a front for the militant group, operates openly in the country.

India's foreign ministry urged Pakistan to end "selective approaches to terrorism".

"Given the scale of tragedy that Pakistan itself has faced in recent days, it is incumbent on it to realise that no compromise can ever be made with terrorists," Akbaruddin said.