The death of a self-proclaimed holy man from southern India has thrown millions of his supporters around the world into mourning and set off speculation as to who will inherit the leadership of his network, said to be worth at least £5 billion ($10.3 billion).

Thousands of police had been standing by in the state of Andhra Pradesh as the health of the guru Sathya Sai Baba gradually got worse, after he was hospitalised a month ago and needed breathing support and dialysis.

Two days ago doctors announced he was suffering from multiple organ failure and had stopped responding to treatment. After the 86-year-old's death was announced at his ashram in Puttaparthi village, people started pouring into the temple complex.

Officials announced that the guru's body would remain in the temple until today and that a funeral, reportedly with state honours, would be held tomorrow.

After news of his death emerged, India's Prime Minister, Manmohan Singh said: "Sathya Sai Baba was a spiritual leader who inspired millions to lead a moral and meaningful life. His death is an irreparable loss to all, and the nation deeply mourns his passing."

The saffron-robed guru had a vast following and his movement established ashrams in more than 126 countries. His supporters included high-ranking politicians, movie stars, industrialists and athletes. Among his biggest supporters was Isaac Tigrett, the co-founder of the Hard Rock Cafe chain, who sold his stake for more than US$100 million ($125 million) and donated millions to Sai Baba to set up a hospital in Puttaparthi to help the rural poor.

The guru used to tell those who gathered to hear him speak: "I am God. You too are God. The only difference between you and me is that while I am aware of it, you are completely unaware."

Yet for all his followers, Sai Baba was an often controversial figure who was condemned by some as a fake and whose purported miracles, when he would apparently pull magic ash from his hair, were denounced as conjuring tricks. The man who never married and had no children, was also accused of sexually abusing some of his followers, though he claimed these allegations were propaganda designed to undermine him.

A key issue will now be who succeeds Sai Baba as head of an organisation with its global network of religious centres. A recent report in India's Open magazine suggested no successor had been decided by the guru.

"Sathya Sai Baba has not named a successor," said a state politician. "His is a strange case of a living god. Sai Baba's powers cannot be passed on, only his legacy can."

The report said that a nephew, 39-year-old RJ Ratnakar Raju, is a trustee of the Sathya Sai Central Trust. While the nephew could stake his claim, most trustees are said to back a former government official called Chakravarthi, who became a follower of the guru more than 25 years ago and held a senior position at the trust's university.