Pakistan had trained militant groups to fight against India, former Pakistan president Pervez Musharraf has said in a candid admission.
In an interview to German magazine Der Spiegel, Musharraf said militant groups "were indeed formed" to fight India in Kashmir.
He said: "The government turned a blind eye because they wanted India to discuss Kashmir."
"It is the right of any country to promote its own interests... when India is not prepared to discuss Kashmir at the United Nations and is not prepared to resolve the dispute in a peaceful manner," he said.
Islamabad rubbished the former military ruler's statement as "baseless".
"I do not know really what prompted him (Musharraf) to say this because he's not in Paki-stan and I would not really know as to the purpose of saying this," Pakistan Foreign Office Spokesman Abdul Basit was quoted as saying by a news channel.
"But as far as government of Pakistan is concerned, I strongly refute these baseless suggestions," Basit added.
In New Delhi, Information and Broadcasting Minister Ambika Soni told reporters India had always believed terrorism was coming to India from across the border and asserted that action will be taken in the matter.
"It is not that we didn't say this, now if what you are saying that the former President of Pakistan has said something I am confident that the government will take appropriate action," she said.
To a query on whether the Pakistani security forces trained the militants, Musharraf said: "The West was ignoring the resolution of the Kashmir issue, which is the core issue of Pakistan. We expected the West — especially the US and important countries like Germany — to resolve the Kashmir issue. Has Germany done that?"
The 67-year-old former Pakistan army chief, who masterminded a coup in October 1999 and overthrew the Nawaz Sharif government, said whenever Pakistan was in turmoil, "everybody looks to the army. But I would suggest the times of military coups in Pakistan are over".
He lamented the West blamed Pakistan "for everything".
"Everybody is interested in strategic deals with India, but Pakistan is always seen as the rogue."
To a query on whether he might meet the same fate as that of Benazir Bhutto who was assassinated on her return to Pakistan, he said: "Yes, that is a risk, but it won't stop me. I am earning good money, but Pakistan is my country."