Major Reinado was detained in July
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Troops in East Timor are searching for a rebel leader who broke out of prison in the capital, Dili.
Major Alfredo Reinado, blamed for some of the country's recent violence, was one of more than 50 prisoners reported to have escaped from the jail.
Maj Reinado is a former military officer who led a rebel faction of the security forces during unrest in May.
More than 20 people were killed in the street clashes which were sparked by a decision to sack 600 soldiers.
The violence led to the resignation of Prime Minister Mari Alkatiri and his replacement by the then Foreign Minister, Jose Ramos Horta.
Prison walls
Australian police liaising with personnel in Dili confirmed the escape.
"It is understood 56 prisoners are currently unaccounted for, one of those being Mr Alfredo Reinado," an Australian federal police spokesman said.
A prison warden at the Becora Penitentiary told the Associated Press news agency that prisoners had escaped by breaking down walls in a wing of the prison.
Maj Reinado was arrested last month for possessing illegal weapons.
The escape came a day after Malaysian troops officially withdrew from the international force in East Timor.
Four hundred soldiers from Malaysia have been in East Timor since the unrest erupted, along with personnel from Australia, New Zealand and Portugal, to help restore order.
There have been sporadic incidents of violence in recent weeks, but the situation has remained for the most part calm.
Australia and New Zealand are also moving to reduce their deployments as the UN prepares to send a new peacekeeping mission of 1,500 police to East Timor.