Pakistani-born Canadian citizen Tahawwur Hussain Rana and his accomplice David Headley are likely to admit during their trial in the US next month that they masterminded the Mumbai terror attack at the behest of Pakistan's spy agency ISI, according to a report Monday.

The trial of Rana and Headley begins in Chicago on May 16. It was postponed in February at the request of Rana's lawyer.

"India-Pakistan tensions will likely be inflamed by a trial that's slated to begin in the United States next month: New court documents reveal that two terrorist operatives accused in the 2008 Mumbai massacre conspiracy are preparing to say they believed themselves to be working for Pakistani spies,'' according to the Globe and Mail newspaper here.

Rana, 49, who runs immigration service in Chicago with offices New York and Toronto, was arrested Oct 3 for plotting to attack the Danish newspaper that published the controversial cartoons of Prophet Muhammad in 2005.

Investigators found that Rana was also involved in helping David Headley, whose real name is Daood Gilani, in plotting the Mumbai terror attacks of November 2008 which left 160 people dead.

Headley had travelled to India for doing the surveillance work for the Lashkar-e-Toiba before the Mumbai terror attacks.

As India has all along suspected that Pakistan's ISI (Inter-Services Intelligence) had a role in the terror attack, the report said, "Mr. Rana's trial threatens to lend an aura of credence to the suspicions of ISI complicity. According to court documents, the jury will hear the two Chicago conspirators say they believed themselves to be working for both LeT and the ISI.

"Previously secret testimony heard only by a grand jury is referred to in a decision published earlier this month.''

But Headley in his testimony to the grand jury has said, "I also told him (Mr Rana)... how I had been asked to perform espionage work for ISI,'' says the newspaper.

Having turned FBI informer to escape the death penalty, Headley will reveal the blow-by-blow of the Mumbai massacre surveillance scheme when he gives evidence against Rana, says the report.

Headley's testimony will reveal how he anglicized his Pakistani name, cultivated ties with LeT, videotaped sites in Mumbai, and briefed his handlers in Pakistan in the run-up to the carnage, according to the report.

About his entry into India under a "false flag" to scout targets, Headley has told the grand jury that "I told (Mr Rana) about my assignment to conduct surveillance in Mumbai. ... I explained to him that the immigration office would provide a cover story for why I was in Mumbai.''

To save himself, Rana has been struggling to explain away allegations that he gave Mr. Headley the papers that allowed him to pose as an immigration consultant.

But in his recent filings in his defence, Rana has argued "that he is a Pakistani patriot who was led to believe the ISI wanted his help - and therefore he should get the equivalent of diplomatic immunity.''

But Judge Harry Leinenweber ruled April 1 that Rana's defence is "objectively unreasonable."

"Defendant's proposed defence is that his alleged illegal acts of providing material support to terrorists - at least those related to the Mumbai attacks - were done at the behest of the Pakistani government and the ISI, not the Lashkar terrorist organization," reads the decision.

"He argues that he is entitled to a public-authority defence because he acted under the authority - whether actual or apparent - of the Pakistani government and the ISI.''