Mr Saeed now heads the Jamaat-ud-Dawa group, widely seen as a front for LeT - which is blamed for the 2008 Mumbai attacks in India.

A $2m bounty was also announced on Abdul Rehman Makki, Mr Saeed's brother-in-law and co-founder of Lashkar.

Both Jamaat-ud-Dawa and Lashkar-e-Taiba are blacklisted by the US.

The US announced the award for their capture or information leading to their capture, officials said.

US Undersecretary of State Wendy Sherman announced the bounty for Lashkar-e-Taiba’s leader and deputy on Monday during a visit to India, according to The Times of India newspaper.

The move comes at a particularly tense time in the troubled relationship with the US and Pakistan.

Pakistan’s parliament is currently debating a revised framework for relations with the US in the wake of American air strikes that killed 24 Pakistani soldiers inNovember at two posts along the Afghan border.

Pakistan retaliated by kicking the US out of a base used by American drones and closing its border crossings to supplies meant for Nato troops in Afghanistan.

The US hopes the parliamentary debate will result in Pakistan reopening the supply lines. The closure has been a headache for the US because it has had to spend more money sending supplies through an alternate route that runs through Central Asia. It also needs the route to withdraw equipment as it seeks to pull most of its combat forces out of Afghanistan by the end of 2014.