BOMBAY, July 29 (Reuters) - At least 18 people died in the rain-ravaged city of Bombay whenn rumours a lake had burst its bank triggered a stampede, taking the death toll after two days of monsoon flooding in the region to nearly 730 on Friday.
Authorities in India's financial hub began shifting debris to prevent the spread of disease and started counting the cost of the rains which paralysed the city for two days and left tens of thousands of people struggling to return to water-logged homes.
Police were on alert to prevent panic after people in a crowded slum in the north of the city of 15 million rushed out of their homes in pitch darkness late on Thursday, hearing rumours of floods that turned out to be unfounded.
"We didn't quite understand what was going on but everyone was rushing out of their houses and we also followed them," one young mother told Indian television. "It was totally dark outside and in all the commotion a lot of people, especially women and children, got pushed down and trampled."
Seven children died and seven people were injured in the stampede and police used loudspeakers to calm panicked residents.
"There were rumours of a lake bursting its banks ... and a tsunami that led to the stampede," a police official said.
Bombay's mayor urged people not to listen to rumours.
"It's easy to scare the people now as they have suffered a lot due to the flood," Dalvi Dattaji told Reuters.
Relief coordinators put the city's death toll at about 370, more than half the total for the western state of Maharashtra.
A landslide at a slum near the Bombay suburb of Andheri killed at least 67 people, and efforts continued to retrieve dozens more bodies believed to be buried in the mud.
Rescuers were still trying to recover the bodies of an estimated 100 people buried under an avalanche of mud in the village of Juigaon, 150 km (95 miles) south of Bombay.
Newspapers reported that 16 people had died in their cars in Bombay, trapped by rising water levels which jammed the doors.
City authorities and health workers began clearing rubbish which had been washed onto the streets, spraying against mosquitoes and handing out medicines to stop diseases.
"Our focus currently is to prevent outbreaks of any major diseases. Wastes are being cleared on an urgent basis and we have advised people to drink only boiled water for the next four to five days," Dattaji said.
Meteorologists warned more rains may be on the way even as the city tried to get back to normal. Roads were clearing, trains were running more frequently and Bombay's airport began operating normally after being shut for two days.
Workers who had finally made it home on Thursday -- after one or two nights in hotels, on office floors or on the street -- returned to work, and trading on financial markets resumed.
The chaos was a brutal reminder of Bombay's rickety infrastructure, despite a hugely ambitious $6 billion plan to turn it into the next Shanghai.
Prime Minister Manmohan Singh, visiting Bombay on Thursday, announced a 5 billion rupee ($115 million) aid package for relief work but Dattaji said the city would require at least 10 billion rupees to repair damaged roads, rail and other infrastructure.
The federation of chambers of commerce said the loss of business income for the region was about 7 billion rupees, 4.5 billion of that for the city alone. ($1 = 43.48 rupees) (Additional reporting by Suresh Seshadri)
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