A stampede set off by rumors of a dam burst killed at least 15 people, including seven children, in a Bombay (search) shantytown after record-breaking monsoon rains, a top government official said Friday.

More than 25 people were injured in the stampede, which occurred late Thursday in the Nehru Nagar (search) slum in northern Bombay, said R.R. Patil, deputy chief minister of Maharashtra state.

"People died due to false rumors," Patil told The Associated Press. "Fifteen people have been killed and seven are children."

Patil said rumors of a dam breach and overflowing rivers had spread Thursday evening across several northern Bombay neighborhoods, despite official efforts to quell them. He said police vans with loudspeakers were deployed to stem the panic.

The shanty dwellers panicked after landslides set off by two days of rains that began Tuesday, burying alive dozens of Bombay residents and cutting off neighboring villages.

Bombay, the country's financial capital that also is known as Mumbai, and much of the surrounding state of Maharashtra (search) has been paralyzed. More than 500 people have been killed since the deluge began, including 273 people in Bombay itself.

Television pictures on the private NDTV channel showed anxious women running barefoot from their homes, dragging sleepy and scantily clad children.

Weeping residents rushed with children in their arms to a nearby hospital. "What will I do? What will I do?" sobbed an unidentified mother mourning the loss of her child.

Power and communication networks collapsed across the state after Tuesday's torrential downpour — 37.1 inches — the highest one-day rainfall in India's history.

Power has not been restored to many Bombay shantytowns, including Nehru Nagar.

"Please don't believe these rumors. Keep calm," A.N. Roy, Bombay's police chief told inconsolable relatives at the hospital.