Officials said Edward Leary, 49, might have been planning to extort the city Transit Authority when he took a crude incendiary device into the underground system. The bomb was on Mr Leary's lap when it went off and sent flames shooting through a carriageas it pulled into Fulton Street station in the financial district.
Mr Leary fled the scene but was later found by police two miles away in Brooklyn. He was admitted to hospital suffering extensive burns and was formally charged in his bed yesterday morning. Of those injured, four were described as in a critical condition with third-degree burns.
Mr Leary seemed to be from a middle-class background with a home in New Jersey and property in Brooklyn. Until earlier this year he was employed at a Wall Street financial firm. "He seemed like a regular guy," one former neighbour said. "I would never see him involved in something like this".
But after finding bomb-making equipment at his New Jersey home, New York police became convinced that extortion had been the bomber's motive. "We are comfortable that this is part of a scheme to extort money," Police Commissioner William Bratton said. "It appears that the subway system, the Transit Authority, may have been the intended recipient".
The device consisted simply of a glass jar containing flammable liquid and an ignition mechanism. Passengers in the carriage said they heard a series of pops before flames suddenly erupted and engulfed the interior. The incident occurred close to the World Trade Center where last year a terrorist bomb exploded killing six people and injuring athousand.
New York state's governor-elect, George Pataki, issued a statement urging the death-penalty for Mr Leary. Reinstating the death penalty in the state was a campaign promise of Mr Pataki.