A bomb exploded outside India’s high court on Wednesday, killing nine people and leaving 45 people seriously injured.

The bomb was apparently hidden in a briefcase and blasted at 10am when the court, in central Delhi, was at its busiest.

The death toll is expected to rise to about 60.

India’s home minister, P Chidambaram, was quick to dispel claims that the bomb was a “terrorist attack”, but he failed to say who was responsible.

Local police said no one had claimed responsibility for the incident, but security officials suspected that the Indian Mujahideen, a home-grown extremist network, could have carried out the strike.

The terrorist group has support from Pakistan-based militants fighting Indian rule in Kashmir.

According to federal home secretary, R K Singh, the bomb was placed at the High Court’s security gate which hundreds of people must clear to enter the court.

It shook the courthouse sending judges, lawyers and litigants fleeing from the building.

“There was panic everywhere as the blast occurred,” eyewitness Krishan Kumar said.

Those nearby were momentarily stunned and then started to panic, he added.

Sangeeta Sondhi, a lawyer who was parking her car close to where the bomb exploded said, “There was smoke everywhere. People were running and shouting. There was blood everywhere. It was very, very scary”.

India’s capital was placed on high alert with police checkpoints being set up leading to large traffic jams across the city.

India's National Security Guard commandos, ambulances and forensic teams quickly reached the scene along with sniffer dogs and a bomb disposal unit to check for further bombs.

But intermittent monsoon rain hampered their efforts and police struggled to keep curious onlookers away.

The federal National Investigation Agency said it was working closely with other security agencies to investigate the incident.

The blast was the second explosion at Delhi’s High Court this year after a small explosion in the car park in May.

In July, there was a coordinated terrorist bombing in three crowded Mumbai neighbourhoods, which killed 30 people.

Police suspect the extremist network, known as the Indian Mujahedeen was behind the attacks in India’s financial capital, though no arrests have yet been made.

Indian Prime Minister Manmohan Singh, condemned the attack.

"This is a cowardly act of a terrorist nature," Singh, who is currently on a visit to Bangladesh, told television reporters in Dhaka.

"We will never succumb to the pressure of terrorism. This is a long war in which all political parties, all the people of India, have to stand united so that this scourge of terrorism is crushed,"

The blast outside the high court, which is a court of appeal at state or provincial level, was seen as a high profile but soft target. It comes at a time when the judiciary has come under the spotlight for urging the government to act on issues ranging from corruption to the environment.

Also, ruling Congress party politicians have over the past year attacked the Supreme Court – India’s highest court – for overstepping its authority and intervening in executive functions.

"So an attack on such a target will bring you the maximum mileage," said independent strategic analyst Maj. Gen. Ashok Mehta. "Also, notice that this comes just days before 9/11, so the government should have expected something like this."

Pakistan-based militants attacked Mumbai in coordinated assaults that killed 166 people in 2008, raising tensions with nuclear-armed arch rival Pakistan.

Prime Minister Manmohan Singh and his government came under intense criticism over the handling of those attacks. The government promised a radical overhaul of the security apparatus in India but critics say the reforms have been inadequate and in some cases abandoned.

"This is a glaring example of the shortage of intelligence, both human and technical – something if we had we could have prevented these attacks," said Ajai Sahni, executive director at the Institute for Conflict Management in New Delhi.