From an unassuming office in Edgware, the Pakistani metropolis is ruled by a party Imran Khan accuses of murdering his Movement for Justice colleague Zhara Shahid Hussain

Its neighbours are an Afghan restaurant, a cafe selling fried chicken and a boarded-up, Tudor-style pub. But it is from this first-floor office in north-west London that the Pakistani megacity of Karachi, 4,000 miles away, is remotely governed by a flamboyant and controversial British citizen.

The office is the headquarters-in-exile of the Muttahida Qaumi Movement (MQM), Karachi's most powerful political party. Its leader, Altaf Hussain, has lived in the UK since 1991. These days, he rarely visits his headquarters, but his portrait hangs on the wall next to coloured maps of Pakistan's provinces, a list of MQM candidates who recently took part in Pakistan's general election, and a silver statue of a fist.

On Saturday Imran Khan, the cricketer-turned-politician, accused the London-based MQM leader of being "directly responsible" for the murder of Zhara Shahid Hussain, a senior female member of Khan's Movement for Justice party (PTI). Hussain was shot dead outside her house in Karachi's upmarket Defence neighbourhood. Her driver, who witnessed her murder, is now under police pretection.The sequence of events was this: after Hussain emerged from her car, a man sitting on a moped with an accomplice rushed towards her. Assuming she was being mugged, she threw down her handbag and mobile phone. The man pointed his gun at her forehead. She tried to defend herself, pushing the gun away, only for it to fire into her jaw. The man shot her again, in the back. Her handbag was taken but the wallet from inside it was discarded. "If this was a mugging incident, why did he [the assassin] leave the wallet?" Ahmed Chinoy, head of the Citizens Police Liaison Committee, asked.

A furious Khan also berated Britain. He suggested that Downing Street had failed to heed his claim that Altaf Hussain was responsible for numerous incidents of torture and murder in Pakistan.

In 2007, Khan presented a dossier to No 10, urging the government to have the MQM leader arrested and prosecuted using anti-terrorism laws.

On Saturday, Khan tweeted: "I also hold the British Govt responsible as I had warned them abt Br citizen Altaf Hussain after his open threats to kill PTI workers."

The dispute marks a new low in the already bitter rivalry between Khan's party and the MQM. The PTI accuses the MQM of preventing its supporters from voting during the elections, 10 days ago. (The poll was rerun last Saturday in 43 Karachi polling stations; the PTI cruised to victory after the MQM and others boycotted it.) More broadly, Khan alleges that Britain has ignored the MQM's violent record. The UK's liberal traditions have in this case enabled cold-blooded murder on Karachi's already febrile streets, he says.

Following Khan's complaints, the Metropolitan police is investigating a controversial speech made by Altaf Hussain from London last week. The investigation is in its early stages. The British Foreign Office said on Saturday that it "strongly condemned" all acts of violence in Karachi. It added: "We are deeply saddened by the recent violence in the city, including violence murderously directed against democratic political figures."

The MQM vehemently rejects Khan's allegations. It is suing him for defamation in Pakistan's high court, and says it will do the same this week in Britain. In a statement on the party's website, Hussain says he had nothing to do with Zhara Shahid Hussain's brutal death. Expressing his condolences to her family, he urged Pakistan's government to find the killers and administer "exemplary punishment".

Hussain has not given an interview for some years. His aides in London say he is "unwell". YouTube footage of his British press conferences show him as a larger-than-life figure prone to wild verbal performances characterised by finger-wagging and odd gestures.

His campaign speeches are broadcast from chilly, overcast London to the Karachi faithful, many of them women who hold portraits of their tubby, moustachioed leader.

Speaking from the MQM's office, in Edgware, Mohamad Anwar, one of Hussain's advisers, said the party was a legitimate democratic movement.

Hussain founded the MQM in the 1980s to defend the interests of the Muhajirs, the Urdu-speaking descendants of Muslims who moved from India to Pakistan during partition, in 1947. They arrived in a city then dominated by native Sindhis and Baloch. The MQM's political strongholds are urban Karachi and Hyderabad, in Sindh province; it is at odds with Pakistan's Punjabi-dominated elite, Anwar says.

But critics say that from its earliest days the party showed a readiness to use violence to fight for power.In the 1980s, when Hussain felt newspapers were giving him insufficient coverage, MQM supporters began burning all the city's papers before they could be distributed. "He forced all the media owners to come to the 90 [the party's headquarters] and beg his pardon," said Muhammad Ziauddin, managing editor of the Express Tribune. One paper protested by refusing to publish for one day.

Over the last five years, the MQM has proved to be an extremely troublesome coalition partner, temporarily walking out of the government several times and threatening to bring it down when it didn't get what it wanted. Critics say that when political blackmail fails, it turns to street violence.

"MQM has the ability to dial up and dial down violence when certain political objectives are threatened," said Shamila Chaudhary, a senior analyst at the Eurasia Group. "It's not new, but now they are feeling particularly threatened in their historic domain."

After successfully asserting its authority over Karachi in the 1980s and 1990s, when the military launched operations against the party, the MQM's power base is now under attack. One problem is profound demographic change: the city is filling up with Pashtuns fleeing Taliban violence in the north-west of the country. One informal estimate puts their numbers as high as 25%.

More of a surprise to the MQM is the rise of the PTI. Imran Khan's party had a disappointing result nationally, winning 28 seats, fewer than it had hoped. But in Karachi it managed to snatch nearly 20% of the vote.

Undoubtedly, however, Khan wrested votes from the MQM's core of middle-class supporters. Nusrat Javed, a prominent journalist, said: "The PTI is giving voice to the accumulated rage of middle-class, upwardly-mobile professionals who think the MQM got stuck in the 1980s."Hussain's followers dismiss claims of MQM wrongdoing. Of Khan's murder accusation, Anwar replied: "It's a madman's rant. Khan is a man who has utterly failed, having lost the elections."

Anwar said the MQM was itself a victim of political violence because of its secular beliefs and refusal to compromise with radical Islamists. The Pakistani Taliban frequently targeted and killed MQM party workers, he said. He denied claims that the party engages in extortion, land theft and other mafia-style activities, or that it has a shadowy armed wing.

Leaked diplomatic cables, meanwhile, show the US was impressed with the MQM's municipal record after it won control of Karachi city council in 2005. Its young mayor improved tax collection rates, built roads and devised water schemes in an overcrowded metropolis and port city of 16 million people. "The MQM based in Karachi appears to be transforming itself from a group of thugs to a service-based, grassroots political party," one diplomat wrote in 2008.

Hussain continues to fight for Karachi from self-imposed exile in Britain. Why doesn't he go back? "Look at what happened to Benazir Bhutto," Anwar said. "Would the Taliban spare him? They didn't spare Benazir."

He added: "Benazir lived in London for many years; Nawaz Sharif was in Saudi Arabia. Mr Hussain is no exception." Anwar predicted that Pakistan's ex-president Pervez Musharraf, who was in London and is now under house arrest in Pakistan, would soon be coming back.

The bookshelf at Hussain's London HQ contains some unexpected reading: Imran Khan's autobiography, as well as books on Churchill and India's constitution. According to Anwar, they are justified in their worries. Scotland Yard is so concerned the MQM's office, on Edgware High Street, could be the subject of an attack that a police sergeant calls round twice a day.

These concerns may not be exaggerated: in 2010, Hussain's senior London-based ally Dr Imran Farooq was stabbed to death outside his Edgware home.Why did the MQM have a copy of its arch-enemy's book, Pakistan: A Personal History? Anwar explained: "Of course we can read his autobiography. But Khan is an arrogant and immature man."

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Hizb-e-Islami claims deadliest attack in Kabul this year, which left 15 dead including two US soldiers, four Nato employees and two children

A suicide bomber has slammed his explosives-packed Toyota Corolla into two armoured cars carrying US troops and civilians through Kabul, killing six of the people inside the vehicles and nine Afghan civilian passersby.

Two schoolchildren were among the dead, and a further 39 people were injured when the blast ripped through Thursday morning rush-hour traffic, sending shrapnel slicing through dozens of civilian vehicles.

The explosion was heard miles away on the other side of the city, and sent a thick column of white smoke into the air.

"Around 8 o'clock this morning, two vehicles belonging to foreign advisers were bombed by a Corolla. They were badly damaged, along with 10 civilian cars, and another 20 vehicles in the area were lightly damaged," said Kabul police chief Ayoub Salangi.

The attack, near a stadium where the Taliban once carried out public executions, is the deadliest in Kabul this year. A suicide bomber last struck just over two months ago, killing nine Afghan civilians outside the defence ministry during a visit by the US defence secretary, Chuck Hagel.

Since then Afghan security forces say they have foiled a string of plots to attack the capital, including finding an eight-tonne truck bomb on the outskirts of Kabul. But Thursday's bloodshed, in an area near the heart of the city and its heavily militarised diplomatic and government core, is a reminder of the insurgency's reach.

The attack was claimed by a Taliban-linked group headed by Gulbuddin Hekmatyar, a former mujahideen commander who once received US funding to fight Soviet forces. A spokesman for Hizb-e-Islami, Haroon Zarghoon, said a newly formed suicide squad had attacked American advisers working in the city, after watching them for days.

"The cell had been monitoring the movement and timing of the American convoy for a week and implemented the plan Thursday morning," Zarghoon told the Associated Press. About eight months ago the group killed 12 people in a suicide attack on a minibus carrying foreign pilots to Kabul airport.

The US military confirmed that two of its soldiers were killed in the blast. The Nato-led coalition said four civilians it employed also died, but declined to comment on whether there were any injured survivors.

The remains of one of their vehicles was still at the site several hours after the blast, tonnes of reinforced steel so twisted and lacerated it would have been impossible for anyone inside to escape. However, it was not clear what happened to the second vehicle, which must have carried at least one of the dead as SUVs cannot usually fit more than five people.

The bomber used a model of car so ubiquitous in Kabul that street vendors sell windscreen wipers and other spare parts at junctions. He would have been almost impossible to pick out from the morning crowds in a part of the city where few foreigners travel regularly.

By contrast the armoured vehicles used by most diplomats and military officers, as well as senior Afghan officials, stick out as sleek, heavy targets in the city's swarms of mostly battered vehicles. Many remove their number plates or boast illegal blacked out windows to try and conceal the high-profile passengers inside.

President Hamid Karzai condemned the attack as a "cowardly act of terror … [that]brutally targeted a residential area", but did not directly denounce Hizb-e-Islami. Karzai, who is pushing hard for peace talks and has reached out to the Taliban as errant "brothers", ascribed the attack only to "enemies who don't want to see the Afghan Muslim nation live in peace".

The top US and Nato commander in Afghanistan, General Joseph Dunford, described the bombing as "desperate and indiscriminate", but denied it was a sign of Taliban strength.

"While today's attack shows the insurgents remain dangerous, they are not a threat to the Afghan government and its forces," he said.

Additional reporting by Mokhtar Amiri

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