Pakistan has admitted gangster Dawood Ibrahim's presence in the country, according to a report.

The admission came after a bomb blast at a Karachi business centre, the Kawish Crown Plaza, which the inspector general of Sindh police said was "ostensibly owned by Ahmed Jamal but actually belonged to Dawood Ibrahim", Pakistani journal The Herald said.

"The IGP's statement was backed the same day by the de facto Sindh home minister, Aftab Sheikh, who told reporters that the Mumbai mafioso had a 'network from Mumbai to Karachi and was working in both countries,'" the report said.

"This was the first public admission from senior government functionaries that the Mumbai crime king, Dawood Ibrahim of the infamous D-company, may have acquired substantial interests in Pakistan's business capital."

Prior to this, Pakistan had been maintaining that no such person was present or operating in Pakistan "either directly or through his proxies", it said.

The report, quoting Pakistani intelligence sources, said India's Central Bureau of Investigation had forwarded a report to Pakistan that said Dawood had acquired a new identity -- Iqbal Seth alias Amer Sahib. Chhota Shakeel was Haji Mohammed, while Tiger Memon was operating as Ahmed Jamil, according to the report.

The report also alleged that of the ten passports Dawood had, two were issued by Pakistani authorities, including one bearing the number G866537.

The journal quoted the report as saying that both Dawood and Chhota Shakeel had recently taken up residence in Islamabad and were in the process of "selling off their properties located in various parts of Pakistan".

Two of Dawood's accomplices, Nasser Charsi and Fahim, "may be planning to join their boss in Islamabad", it added.

The Herald said, "Irrespective of the truth in the Indian allegations, there are indications that Pakistan may well be seeking a decisive end to the Dawood Ibrahim saga because of its potential for raising serious security issues, underscored by the blast at Kawish Crown Plaza."

Though stories connected to Dawood could read like Bollywood fiction, "their impact is far from imaginary. Mumbai has already had a taste of the underworld's power and destructive potential and the Kawish Crown blasts may be an indication of what could lie in store for Karachi if the authorities do not move fast to put an end to this real life crime thriller", it said.