The alleged mastermind of the Mumbai attacks was running his group even while in prison in Pakistan, cables released by Wikileaks suggest.
The claim is in a 2009 diplomatic message from US Secretary of State Hillary Clinton.
It says Zaki-ur-Rehman Lakhvi, head of banned militant group Lashkar-e-Taiba (LeT), was responsible for its "military budget" as of last July.
He was held and charged under Pakistani anti-terrorism laws after the attacks.
The three-day rampage in November 2008 by 10 gunmen in the city of Mumbai left 166 people dead.
The leaked cable, sent on 10 August 2009 by Mrs Clinton, says that Mr Lakhvi, along with the group's founder Hafiz Saeed, "continued to run" LeT "despite being detained for their role" in the Mumbai attacks.
Hafiz Saeed, who was held after the Mumbai attacks but released without charge, now heads Jamaat-ud-Dawa, an Islamic charity widely accused of being a front for LeT.
The leaked cable said Mr Lakhvi was responsible for the group's annual $5.2m (£3.3m) "military operations budget" as of mid-July 2009, a time when he was in prison.
"He reportedly used the money to purchase all materials required for LeT operations other than weapons and ammunition," the cable said, quoting a source.
The message goes on to allege that Mr Lakhvi and Mr Saeed "planned, directed and executed" the group's attacks in South Asia.
It says the group is "likely to have used some funds collected in the name of Jamaat-ud-Dawa's charitable activities in support of multiple LeT terrorist operations, including the November  Mumbai attacks".
In his new book Obama's Wars, journalist Bob Woodward mentions a meeting between US National Security Adviser General James Jones and Pakistani President Asif Ali Zardari in May 2010 where Mr Lakhvi is discussed.
Mr Woodward writes that Mr Jones told President Zardari that Mr Lakhvi was not being adequately questioned and "continues to direct the group's operations from his detention centre".
Another classified US state department cable released by Wikileaks says LeT militants were planning an attack on the chief minister of India's Gujarat state, Narendra Modi.
Mr Modi, the chief minister of the western state of Gujarat since 2001, presided over India's worst religious riots in decades.
The sectarian strife erupted in 2002 after dozens of Hindu pilgrims were killed in a train fire in the town of Godhra.
More than 1,000 people, mostly Muslims, died in the ensuing bloodshed.
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