But the silver screen star was found guilty of the less serious charge of possessing illegal arms, namely a pistol and three assault rifles, offences he admitted while claiming the weapons were to protect his family.

As crowds of fans gathered outside the court after the verdict, Dutt's sister, Congress Party MP Priya Dutt, said she was happy her brother had been exonerated of terrorism charges. 'He has waited 13 years for justice. I do feel vindicated today. Here is the verdict that Sanjay Dutt is not a terrorist,' she said.

Dutt has been the most high-profile player in one of the longest-running cases in Indian criminal history. The wheels were first set in motion after 257 people were killed and 713 injured when 12 blasts tore through India's film and financial capital, Mumbai, in 1993.

The atrocities were said to have been orchestrated by the city's criminal underworld, then dominated by members of the Muslim community, as retaliation for communal violence perpetrated against Muslims and the demolition of a 16th-century mosque in northern India. Dutt's case dragged Bollywood's open secret - its links with wealthy organised crime syndicates - into the spotlight. It is now widely acknowledged that gangsters pulled the strings in the world's most prolific film industry throughout the 1990s, using the nation's filmmaking landscape to exert power and launder money. Underworld don Dawood Ibrahim, suspected of masterminding the bomb blasts and now a fugitive, is known to have had close links with many in Mumbai's film industry.

After being arrested 13 years ago, Dutt spent 18 months in custody before being granted bail. His arrest and imprisonment helped fracture the uneasy symbiosis between Bollywood - a take-off of the city's anglicised former name, Bombay - and the criminal underworld, and sent a stark warning from the Indian Central Bureau of Investigation and Mumbai's police that no one was above the law.

Kavi Tejpal Singh Tulsi, a senior advocate of the Supreme Court of India, said the scale of the investigation and the length of the subsequent trials showed the seriousness with which the Indian authorities viewed the blasts.

'This case marks a precedent in India's judicial history as being the largest trial in terms of the number of accused, the number of victims and witnesses. The state took extraordinary interest in pursuing it,' he said.

More than 680 witnesses were called to testify and 35,000 pages of evidence was placed before a specially appointed judge after the cases against Dutt and many of his 122 co-defendants began more than a decade ago.

Some of those charged died in custody, waiting for the proceedings to be completed.

At Tuesday's hearing, the star's lawyers successfully applied for bail so Dutt could see to personal and financial matters, including the small question of three unfinished films and seven long-term film projects.

On Thursday, he appeared again to plead for leniency.

For Bollywood insiders, who had been waiting on tenterhooks for the verdicts to be announced, his conviction for the possession of illegal arms was a blow. But his acquittal on the more serious terrorism-related charges - and the bail granted to a man whose film projects look set to earn the industry tens of millions of dollars - was a relief.

Ashok Thakeria, co-producer of the half-completed comedy, Dhamaal [Madness], in which Dutt stars, told The Asian Age: 'Once a solid decision [on sentencing Dutt] is taken, it is only then that we will decide our next course of action.'

Dutt's personal life has been a staple of the Indian film industry's rumour mill for years; two failed marriages, heavy drinking, a well-publicised drug problem - as well as success in action roles - helped give the actor, who has more than 100 films to his credit, the title of Bollywood bad boy.

But recent years saw the father-of-one score unexpected accolades starring in comic roles; first in the 2003 hit, Munnabhai M.B.B.S., in which he played a goofy criminal trying to fulfil his father's dream of becoming a doctor, and its sequel this year, Lage Raho Munnabhai [Keep on Going Munnabhai], in which he starred as a soft-hearted gangster who adopts Gandhiesque principles of non-violence to win the love of a girl.

The movie struck a chord in India, making Gandhi hip, coining the phrase 'Gandhigiri', and helping to render his teachings relevant to modern-day problems. Across India, people mimicked the non-violent protests, distributing flowers to 'enemies' to achieve their ends.

Lage Raho Munnabhai last month became the first full-length Hindi-language feature film to be screened at the United Nations in New York. The Boston Globe in October called on Hollywood to take heed and promote 'Gandhigiri, Kinggiri or Kennedygiri'.

In keeping with the Indian film industry's love of nepotism, Dutt's parents were also actors. His Hindu father, Sunil Dutt, and Muslim mother, Nargis, were stars of the 1957 Indian cult film classic Mother India, dubbed by many to be the subcontinent's Gone with the Wind. The couple was for decades considered part of Bollywood's film elite and both later became politicians.

But tragedy has also marked Dutt's life. His first wife, Richa Sharma, with whom he had a daughter, died of cancer, a disease that also claimed the life of his mother days before his Bollywood film debut in the 1981 hit, Rocky (not the American one). The pain of his past, coupled with his public falls from grace and illustrious film heritage, helped to characterise the 1.88-metre actor as an errant, wayward man in need of guidance.

Veteran Bollywood singer and one of Dutt's friends, Asha Bhosle, said after last week's verdict: 'One learns from mistakes in life. I am sure this experience will teach him a lot and he will be able to take charge of his life for the better.'

Some legal experts have called into question the acquittal on the terrorism charges, suggesting his celebrity and family political connections may have influenced the outcome.

Though sentencing will be delayed until verdicts are passed on the remaining 31 defendants waiting to hear their fate, what appears certain is that Dutt's popularity with India's film-crazy masses will continue.