Mr Singh drew the parallel at a conference in New Delhi on social and caste injustices saying it was modern India's failure that millions of Dalits (meaning "oppressed") were still fighting prejudice.

"Even after 60 years of constitutional and legal protection and support, there is still social discrimination against Dalits in many parts of our country," Mr Singh said.

"Dalits have faced a unique discrimination in our society that is fundamentally different from the problems of minority groups in general. The only parallel to the practice of untouchability was apartheid."

By raising the spectre of apartheid the prime minister has publicly repudiated the stand taken by the previous BJP-led government.

At a UN human rights conference in 2001 Dalit activists had pushed for a resolution linking the treatment of low-caste Hindu "untouchables" to race-based oppression. The resolution proved abortive thanks to concerted opposition from official Indian delegates. They maintained that unlike in apartheid South Africa, the constitution in India does not endorse or tolerate any form of discrimination.

Mr Singh's statement was welcomed by community leaders yesterday.

"This is the first time that an Indian prime minister has linked Dalits with apartheid, and Singh needs to be congratulated for that," said Chander Bhan Prasad, a Dalit writer, teacher and activist. "But the more correct comparison would be with the situation of blacks in the US, where affirmative action is helping the community to get jobs in the private sector, including the media."

Activists have been lobbying New Delhi to ensure jobs for Dalits in India's burgeoning business corporations. But though there are proposals to pass a law reserving jobs for Dalits in private companies, Mr Singh's government, faced with opposition from business leaders, appears more keen to use persuasion rather than a legal stick.

"The number of jobs in government is very small compared to the jobs being created in the private sector thanks to a booming economy," said Mr Prasad. "If Singh really wants to help Dalits, he should look into how jobs can be ensured in the private sector."

Yesterday Mr Singh also said it was was a cause for regret that large sections of India's 130 million-strong Muslims had not benefited from the country's rapidly expanding economy.

The Hindu practice of untouchability is illegal in India and although affirmative action providing university admissions and government jobs to low-caste Hindus has helped create a small but vocal middle class among the country's 250 million Dalits, the community still remains abysmally impoverished and oppressed.

Even those Dalits who have benefited from the government's affirmative action can often become victims of upper caste brutality. In a recent case in the western Maharashtra state, four members of a land-owning Dalit family were lynched by a mob of upper-caste Hindus after they were paraded naked in their village and two women were raped.

Anger over the killings in the Maharashtra village was seen as one of the causes of a major riot by Dalits in Mumbai, when trains, buses and cars in India's financial capital were attacked and burned.

The riot proved a reminder that despite all the oppression, sections of Dalits have organised themselves politically to face the upper caste challenge. One of India's most mercurial regional leaders, Mayawati, has even been chief minister of the northern Uttar Pradesh state, where her party is a frontrunner in next year's state assembly elections.