Bandit frees hostages and abandons plan to shower Milan with money

A tense 24-hour hostage crisis in a Milan bank came to a safe, almost tragi-comic conclusion yesterday as the lone bandit, armed with a hand grenade and a sawn-off shotgun, released his four hostages one by one and gave up his dream of dropping hundreds of banknotes out of a helicopter to celebrate New Year's Eve.

It started out as a war of nerves between the assailant, Domenico Gargano, and law-enforcement officials sitting outside the suburban branch of the Banca Popolare di Milano. The first big breakthrough came in the early hours of yesterday, as the manager of the bank, Irma Morello, was released in exchange for 4bn lire in cash - around pounds 1.5m. It then became apparent that Gargano, a 35-year-old Sicilian with a long criminal record in recycling stolen goods, had no escape plan. Indeed, rather than negotiating a low- profile exit from the bank building with his loot, he asked for a helicopter from which he could drop the banknotes over the city.

The police had been considering handing over more money to safeguard the remaining two hostages (the first had been released on Monday) but concluded they had a fairly harmless fruitcake on their hands.

By mid-morning, Pietro Ferrari, 53, who was completing his last day at work before taking early retirement, was released. In mid-afternoon Gargano threw a wad of banknotes out of a first-floor window; two hours later he released his remaining hostage, deputy manager Vincenzo Cortellini, handed over his weapons and negotiated his own future with a magistrate and a Carabinieri officer.