LONDON — When British police officers mounted a dawn raid on a calm London suburb on Tuesday, with orders to arrest the powerful Pakistani political boss Altaf Hussain, the reverberations were felt most intensely 4,000 miles away in the port city of Karachi.
Businesses hastily shuttered, trains stopped and workers raced home, clogging the streets in chaotic traffic jams, amid panic that the arrest of Mr. Hussain, a charismatic figure who for the past two decades has controlled Karachi from his exile in England, would result in an eruption of political bloodshed.
The sight of a sprawling megalopolis of 20 million people so visibly girding itself for trouble was a measure of the power that Mr. Hussain, through his Muttahida Qaumi Movement party, has come to wield over Karachi — a vital economic hub long divided by violent factional competition, more recently threatened by Taliban infiltration, and suddenly seized by trepidation over what will happen now that Mr. Hussain is in the custody of London’s Metropolitan Police.
“This is potentially very serious,” said Abbas Nasir, a former editor of the Pakistani newspaper Dawn. “The removal of someone as powerful as Altaf Hussain is always going to leave a vacuum. His party is in for a challenging time.”
The British move against Mr. Hussain is the culmination of a criminal investigation that started with the murder of a former M.Q.M. official near the party’s London offices in September 2010, and has since broadened into an inquiry that has targeted Mr. Hussain’s personal finances.
Over the past 18 months, the Metropolitan Police have raided Mr. Hussain’s house and offices in London, impounded about $600,000 in cash and a quantity of jewelry, and arrested a nephew who worked as his personal assistant.
Mr. Hussain, however, had avoided arrest until Tuesday morning. A police spokeswoman declined to confirm his identity — he will be named only if British prosecutors bring him to trial — but did confirm that a 60-year-old man was being questioned on suspicion of money laundering.
On Tuesday, Pakistani political operatives gathered at Southwark police station in central London where Mr. Hussain, who is said to be in poor health, had been taken by the police. And at the party’s heavily guarded headquarters in Karachi, senior officials tried to put a brave face on the M.Q.M.’s gravest crisis in decades.
Clearly playing for time, some party officials initially claimed that reports of Mr. Hussain’s arrest were a rumor. Later, others claimed, inaccurately, that he was still at his London home and had been invited by the police to an interview. Senior leaders resorted to angry speeches that described the charges as a conspiracy against their beloved leader.
One image circulating on the Internet depicted a man with bloodied hands ripping open his own chest to reveal a picture of Mr. Hussain. “Only Altaf Till Death,” read the slogan.
“What the Metropolitan Police is doing is incomprehensible to us,” Farooq Sattar, a senior leader, said to a Karachi crowd.
Despite the shows of loyalty, the M.Q.M. is likely to face severe challenges. Few doubt that Mr. Hussain’s arrest will test the internal unity of the party, which represents Mohajirs, the term for the mainly Urdu-speaking Muslims whose families moved to Pakistan after the partition from India in 1947 and who make up a sizable portion of the population in Karachi.
M.Q.M. has controlled a bloc of about 20 parliamentary seats in Karachi that has won the party a place in successive coalition governments. But it also exercises influence through a network of heavily armed street gangs that engage in violent rivalry with the party’s political opponents, mostly from other ethnic groups.
Mr. Hussain, who has not set foot in Pakistan since he fled in 1991, exercises his power by summoning party subordinates to meetings in London, and by addressing giant street rallies in Karachi by phone and video conference.
But as the British police have closed in on him in recent months, his organization has showed signs of internal strains. Some leaders have left Pakistan after falling out with Mr. Hussain, including Syed Mustafa Kamal, a former mayor of Karachi.
The worry now is that if British prosecutors proceed with a money-laundering trial, the party, which is rooted in Mr. Hussain’s personality cult, could fall apart, possibly bringing intense violence to the streets of Karachi.
The British charges against Mr. Hussain stem from a police investigation intothe stabbing death of Imran Farooq outside his London home in 2010.
Mr. Farooq had once been a party loyalist and close associate of Mr. Hussain, but the two men fell out before his death. The police investigation quickly focused on Mr. Hussain and his party.
This spring, British officials asked Pakistan for access to two Pakistani men linked to Mr. Farooq’s death, and who are believed to be in the custody of the Inter-Services Intelligence, or ISI, the country’s top military intelligence agency.
That investigation is troubling for Mr. Hussain’s party, but it is a broadened inquiry into his personal finances that have caused the recent trouble. Police officials have said they are examining the source of the money that pays for Mr. Hussain’s lifestyle in London, and whether he has paid tax on it.
One businessman told The New York Times, speaking on the condition of anonymity because of the sensitivity of the matter, that after he had donated $25,000 to the M.Q.M., he was asked by party officials to sign a statement saying he had donated $500,000.
In the coming days, Karachi residents will be anxiously waiting to see whether Mr. Hussain will face criminal charges, and how his troubled party will react. So, too, will the national government in Islamabad.
In a statement issued Tuesday evening, the office of the Pakistani prime minister, Nawaz Sharif, said that it had directed the government of Sindh Province to step up security in Karachi, and that it was ready to provide “all kinds of legal and moral support” to Mr. Hussain.