He spoke as Bhagat, 23, appeared in court on 20 charges of theft against tourists.
McLaughlin, 28, was strangled and her face was slashed with a broken bottle during the terrifying attack in Palolem, south Goa, last week.
Bhagat has allegedly admitted to police that he killed her after hours of drinking at a festival last Monday night.
But he denies raping her, claiming the pair were involved in an "on-off" relationship, police have told MailOnline.
Varma, who also worked on the case of Scarlett Keeling, the 15-year-old murdered in Goa in 2008, continued: "Bhagat's story is that he was alone with Danielle, which is doubtful.
"There has to be more than one person involved. I have no doubt.
"He would not have been able to overpower Danielle on his own.
"I have a feeling that it was more than one person but we have to verify everything with evidence.
"I believe Danielle's attackers took her to another place other than the place where the body was found.
"Bhagat's clothes had blood on them and Danielle's clothes were found close to his house.
"But these small criminal gangs operate in groups of four to six people.
"They share the spoils of their exploits.
"They are very loyal to each other."
The lawyer is now urging Goa police to keep searching for the other attackers.
"We are not satisfied with an arrest and a confession. We are looking for a conviction.
"We want the police to continue their investigation and to keep gathering evidence and not be satisfied with only a confession.
"The police are planning to lay charges within a month.
"But we need to verify things.
"We don't want the police to rely solely on Bhagat's confession before taking the case to trial.
"The forensic report will take two or three weeks to complete.
"If the vaginal swabs reveal there is sperm from more than one person then that is clear evidence that Danielle was attacked by more than one man."
Danielle's best friend Nicole Farren also urged local people to come forward with all the information they have to bring McLaughlin's abusers to justice.
"We understand there is a lot of pressure on you, the local people, to protect criminals operating in the area who have a lot of power," she said.
"Sometimes it is time to stand up and take a stand and say 'no, enough is enough'."
At a memorial service for McLaughlin on Sunday she added: "We understand that there have been cases of tourists who have been murdered in the past which were quickly solved by the police.
"But after the trial these criminals have been acquitted.
"We sincerely hope that this will not happen in the case of our Danielle."
"We want justice for Danielle, she deserves justice."
Varma spoke out as Bhagat appeared in court in Goa on separate charges.
The murder suspect is accused of 20 offences in addition to the brutal sexual attack and killing of the 28-year-old adventurer.
The 23-year-old made a brief appearance at the Canacona Court House today to face charges of theft.
He is accused of stealing laptops, mobile phones, cash and jewellery from four tourists, including one holidaymaker from the Netherlands, in 2015.
Bhagat faces a further 19 cases of robbery and theft in the beach resorts of south Goa. None involves violence.
His face covered with a white scarf, and wearing blue polka-dot shorts, a black T-shirt and flip-flops, the suspect was moved the short distance from Canacona police station to the courthouse in a police car.
Bhagat's distraught mother Surekha came to the court house for the hearing and appealed to police to let her see her son when he was returned to custody. Her request was refused.
Varma has praised the Farren's bravery. She came to Goa to repatriate Danielle's body.
He said: "Danielle's friend Nicole wants to know the details of the case from the legal perspective."
McLaughlin's body is expected to be repatriated today. A British coroner will arrange for her body to be returned to her family in Donegal, Ireland.
