A series of unprovoked attacks on Indians in Australian cities - including stabbings and a fire-bombing - is ballooning into a serious diplomatic issue that has now involved the prime ministers of both countries.

The beatings have been reported extensively by the Indian media and have the potential to damage Australia's standing in Asia, where the racism of the former White Australia immigration policy has never been forgotten.

They have also triggered violence in the streets of Melbourne during a protest that shut down a key city intersection until early yesterday morning.

The sudden eruption has taken Australia by surprise, although reports of racism and "curry-bashing" have been circulating for months and have led to internet warnings to students not to study in Australian schools and universities.

The warnings and the spate of attacks have alarmed officials who have overseen the growth of education to become Australia's third-biggest source of export income, with the number of Indian students doubling in the past three years to become a A$2 billion-a-year industry.

Politicians and police have tried to play down allegations of racism, but the anger that has followed the beatings also has the potential to create its own momentum.

Australia had previously infuriated New Delhi with its treatment of Indian doctor Mohamed Haneef, who was falsely accused of terrorism and deported after charges were dropped.

Prime Minister Kevin Rudd told Parliament yesterday the federal Government would work with the states and territories to improve the safety of international students.

He has spoken to Indian Prime Minister Manmohan Singh after talks between Foreign Minister Stephen Smith and counterpart S.N. Krishna, whose department had earlier summonsed Australian Ambassador John McCarthy to express New Delhi's concern.

"I speak on behalf of all Australians when I say we deplore and condemn these attacks," Rudd told Parliament. "I said to Prime Minister Singh that the more than 90,000 Indian students are welcome guests in our country."

In the past month:

Student Sourabh Sharma, 21, was beaten by seven men on a Melbourne train, fracturing a cheek and breaking his teeth, before A$450 in rent and tuition fees and his phone were stolen.

Balinder Singh, 25, was stabbed in the abdomen with a screwdriver as he handed over his wallet to two thugs.

Shravan Kumar, 25, and three friends were attacked by a teenage gang armed with screwdrivers. Shravan was stabbed in the head and may not fully recover.

Rajesh Kumar, 25, suffered burns to 30 per cent of his body when a petrol bomb was hurled through his window in Sydney. He was saved by his flatmate, who stifled the flames by wrapping him in a blanket.

Indian community leaders said violence had been escalating for the past four years, with more than 100 attacks in the past year and 30 assaults in Sydney alone in the past 30 days.

Reports of the beatings have flooded the Indian media and the internet, including an interview with Baljinder Singh in which he urged compatriots to stay away from Australia. He told CNN-IBN: "I want to advise every student planning to come to Australia not to come here. There is no life here."

Bloggers have been lashing the nation. "Australia as everyone knows is back again to its ancestral savage nature," said one. Another website ran lists of survival tips from Indians living in Australia.

In Melbourne about 2000 protesters blocked the key intersection outside Flinders St Station on Sunday, at one stage erupting into violence as mounted police pushed back demonstrators hurling stones and bottles.