The hijacker was killed by a single shot fired through the windscreen after the bus crossed the border from northern Greece to the central Albanian town of Elbasan.

The BBC's Peter Biles: "The authorities are still trying to establish what happened"

A young Greek man who attempted to get off the bus was also accidentally shot dead by the police, reports say. One other passenger was wounded.

The dead passenger has been named as Yiorgos Koulouris, but the circumstances of his death are confused. The Albanian news agency says he was killed by the hijacker. The remaining seven hostages, including the bus driver, were freed.

The BBC's Peter Biles, reporting from Albania, says questions are likely to be raised about the handling of the operation.

'Foolish behaviour'

Albanian special forces stormed the bus

Greek Public Order Minister Michalis Chrysohoidis said storming the bus was "very foolish behaviour on the part of the Albanian police which showed indifference about human lives".

He dismissed reports that the hijacker had been responsible for the hostages death and said Greece would lodge a formal protest with the Albanian authorities.

The hijacker, who had been a former convict in Greece, is said to have demanded 50 million drachmas ($160,000) before embarking on the 12 hour road journey into Albania.

It seems the Greek authorities handed the money over, but the hijacker failed to free his hostages and forced the bus to cross the border into Albania.

Former convict

Greek police negotiated the release of some hostages

Albanian officials say the hijacker was a 25-year-old Albanian man, Flamur Pisili, a former convict in Greece who had been imprisoned for theft and possession of fire arms.

He said he had been maltreated by the Greek authorities and wrongly imprisoned.

The bus was hijacked in the northern Greek port of Thessaloniki on Friday.

Armed with an automatic rifle and grenades, Pisili had threatened to kill the hostages.

Police say Flamur boarded the bus after having an argument with two police officers in Epanomi, a Thessaloniki suburb, over his residence and work permit in Greece.

"The cops have ruined my life since I came from Albania. They want to throw me in jail," he told Athens's Skai private radio station, speaking on a mobile phone.