The hijacker was shot dead by police after being disarmed by one of his hostages, an off-duty conscript soldier, according to Greek Defence Minister Akis Tsohatzopoulos.

The minister contradicted earlier police accounts, which said elite forces had burst into the bus and disarmed the hijacker, who had apparently been carrying hand grenades.

Earlier, the man had released two of his seven hostages, keeping the others on board the bus, which he had hijacked near the port of Thessaloniki.

Relatives of the bus driver waited for news

Police had surrounded the vehicle and were negotiating with the man, who was said to have demanded money and a safe passage to Albania.

The hijacker took control of the bus on Wednesday and apparently tried to cross into Albania. But the vehicle was stopped on a country road about 10km east of the northern town of Florina.

Some 50 people were on board when it was seized, but most were later set free.

The hijacker threatened to kill the remaining hostages if the police tried to intervene.

It was the second time in less than two months that an Albanian citizen had hijacked a Greek public bus.