The boy, called Shubham, was discovered after he was heard crying and calling for his parents, who died in the rail disaster.

The death toll has climbed to 260

Shubham was completely unhurt when he was pulled out from the mangled carriage even though police said it had been crushed like a paper ball.

"It's a miracle. What else can we call it," said officer Randev Singh Hodal.

"We heard a voice in the wreckage. The boy was crying nonstop. He kept saying, 'Take me to my papa. I want my mother.'"

Shubham's grandparents and two aunts were also killed in the crash in northern India.

Mr Hodal, whose family is looking after the boy, said he had been in a state of shock since his rescue and had hardly spoken.

The train ''crumpled like a paper ball''

The accident happened when the Sealdah Express slammed into the derailed coaches of the Golden Temple Frontier Mail train near the town of Khanna in Punjab.

Rescue workers using acetylene torches carefully cut through the wreckage after hearing Shubham crying.

They found him crouched under broken wooden blocks that had formed a tent over him.

Police have shown photographs on national television in the hope relatives will come forward to claim him.

Rescuers hampered

Railway Minister Nitish Kumar said compensation of 25,000 rupees ($595) would be paid to families of the dead and 5,000 rupees ($119) for each of the injured.

He has ordered a full investigation, although officials say there is no suspicion of foul play or sabotage.

The accident has been blamed on a weakened coupling which allowed several carriages of the Amritsar-bound Golden Temple Mail to break free and topple across the parallel track.

It is estimated there were as many as 2,600 passengers on the two trains.

Rescuers were hampered by the lack of heavy lifting gear and the fire risk from spilt diesel fuel.

The accident is the worst since 1995 when around 300 died and more than 400 were injured after two express trains collided near Agra.