The ban will apply to individuals or groups that "promote terrorism" directly or indirectly.

The state government blames Maoist rebels for Saturday's explosion.

Thousands have died in Maoist campaigns across central and southern India in the past 30 years. Maoists say they are fighting for the rights of the poor.

Chhattisgarh Home Minister Ram Vichar Netam told the BBC that the decision to introduce the ban was taken in an emergency cabinet meeting in state capital Raipur.

Under the order the government will be able to confiscate the property of individuals and organisations which are seen to be supporting terrorist activities.

There will also be a provision for ordering a jail sentence of between one and seven years.

The order will now be sent to the central home ministry and the president for final approval.

Beyond state borders

The rebels are pressing for the creation of a communist state comprising tribal areas in the states of Andhra Pradesh, Maharashtra, Orissa, Bihar and Chhattisgarh.

They say their aim is to improve the economic and social rights of the poor and of indigenous tribes.

Last month, suspected Maoists killed nine officials in the neighbouring state of Andhra Pradesh.

The attack led the state government there to re-impose a ban on the Communist Party of India (Maoist).

The Indian government believes that there may be 10,000 armed Maoist rebels in India, correspondents say.