Imran Khan, the leader of the Pakistan Tehreek-e-Insaf party, on Sunday blamed the killing of a political activist on the eve of a partial rerun of voting in Karachi on Altaf Hussain, the Muttahida Qaumi Movement (MQM) leader, who runs his party from exile in London.

Zahra Shahid Hussain, the vice-president of Khan's PTI party in the southern province of Sindh, was gunned down outside her home in the upmarket Defence area of Karachi on Saturday.

Police said she died from a shot to the head in an attack that might have been either an attempted mugging that turned deadly or a deliberate political killing. The attack came after a week of protests by PTI activists, who accused the MQM of attempting to intimidate PTI voters into not voting.

Since the 1980s the MQM has maintained a firm grip over Karachi, enjoying solid support from the city's community of mojahirs, the Urdu-speaking descendants of Muslims who moved to Pakistan from India in 1947.

The party has long been accused of having an illegal armed wing intimately involved in Karachi's criminal economy of drugs, extortion and land theft.

On Twitter on Sunday night, Khan, who is being treated for back injuries in hospital, said he held Altaf Hussain directly responsible for the murder of the 65-year-old as he had "openly threatened PTI workers and leaders through public broadcasts". He also criticised the UK for not taking action against Altaf Hussain: "I hold the British government responsible as I had warned them to act against Altaf Hussain after his open threats to kill PTI workers." Khan's attack on the MQM leader, a man few dare to publicly criticise, has capped a dire week for the party, which some commentators believe has been shocked by a weakening of its position in Karachi.

Although it has managed to cling to the 18 seats it had in the last parliament, it has seen its share of the vote fall by almost 10 percentage points and the PTI emerge as major challenger.

Last week Altaf Hussain responded furiously to PTI accusations of vote-rigging with a speech broadcast from London in which he appeared to threaten PTI demonstrators in the sprawling port city with violent retribution.

The Metropolitan police are examining whether he can be prosecuted for inciting violence.

"They have gone into shock over these results," said one Karachi-based security consultant. "People have voted against them because of their utter failure to do anything in the last five years. In retrospect, the PTI could have done even better if they had put more effort into Karachi."

Diplomats say Altaf Hussain's tirades and increasingly erratic behaviour are a growing source of embarrassment to party officials who manage MQM affairs in Pakistan. "They would be much happier if they could speak to him and vet what he says," one diplomat said.

Farooq Sattar, the most senior MQM leader in Pakistan, appeared to accept that Altaf Hussain had gone too far with his speech from London, saying the MQM leader had retracted his remarks and offered an apology.

In the early hours of Sunday he lambasted members of the MQM's central committee for failing to defend the party against media criticism and Khan's explosive accusations.

The MQM, with its solid block of seats in parliament, is used to remaining in power, regardless of which party heads the government.

For the past five years, the MQM has enjoyed enormous influence by being a key coalition partner of the government led by the Pakistan Peoples party (PPP), which was trounced in the election on 11 May.

But Nawaz Sharif, the leader of the Pakistan Muslim League-Nawaz party, has won enough seats in the election to ignore the MQM.

The prospect of the MQM having much-reduced political influence in Islamabad has raised fears it could once again resort to the sort of violence and intimidation that party officials have claimed they have been trying to put behind them.

Sattar, the senior MQM leader, accused Khan of further inflaming a city already vulnerable to violent confrontations between the ethnic groups that live there. "The killing of Zahra Shahid Hussain was a conspiracy by someone who wants to take advantage, to bring Karachi to another test in terms of sectarian and political polarisation," he said.

Khan should wait for the results of a police investigation, he said, adding that the MQM would launch a defamation action against the former cricket star.

Election authorities ordered fresh voting at 43 polling centres in a largely upmarket area of Karachi where there were reports of serious irregularities, including ballot-stuffing and attempts to intimidate voters in the national elections.

The MQM and other parties boycotted the new poll after demanding the election be rerun in the entire constituency.

One PTI voter, called Ashar, who ventured to a polling station at a school in the Defence neighbourhood which was the scene of protests last week, described the killing of Zahra Shahid as "despicable". "It is purely political, because of the power struggle happening right now," he said.