Banker held by Chechens escapes during gun battle

A British banker who was kidnapped in Georgia almost five months ago escaped yesterday during a gun battle between his Chechen captors and government forces.

Peter Shaw, 57, had been kept in a dark pit with another businessman and there were reports that the other man had been shot and killed in the exchange of fire.

Mr Shaw, a former Midland Bank manager who was working as a consultant under a European Union development programme in the former Soviet state, was kidnapped from outside his home in Tbilisi by an armed gang in June, the day before he and his family were due to leave the volatile Caucasus state.

After months of captivity in the remote Pankisi Gorge region with a rumoured £2m ransom being demanded, Mr Shaw, who has four children, saw his chance to escape during yesterday's battle.

"I ran away and I ran as hard and as fast as I could," he told the British envoy Denis Corboy. Later he added: "I was very frightened. I didn't want to move from the bushes until I made sure that the shooting was over. For the past four months, I have been kept in a hole in the ground, chained by the neck, have not been able to walk, had neither light nor sunlight, very difficult."

He said his captors had been trying to move him to another hide-out when the battle began. "Four people came and took me from there ... to the top of the mountain and then one of the guys took the gun from his shoulder, so I rushed into some bushes and then gunfire opened and one of the guys was shot. I walked from there, not knowing where, and saw some lights in the distance."

He was not injured in the rescue operation but added that he needed to recover "from the experience of having been taken away from life for the past five months".

Jack Straw, the Foreign Secretary, said he was "delighted" and most grateful to those who had secured the businessman's release.

Last night details of the incident were unclear. The State Security Minister, Valery Khaburdzania, would say only that Mr Shaw had been released during a special operation by Interior Ministry forces which had "gone to plan". One kidnapper was killed but there were no injuries among the government forces, a ministry spokesman added. Arrests earlier this month were said to have led the security forces to where Mr Shaw was being held.

His family, from Cowbridge, Vale of Glamorgan, said they were "overjoyed" by the news. His daughter Lisa, 31, said: "This is the end of a nightmare. It has been absolutely horrendous waiting all this time. We were not sure if he was dead or alive and have been dreading the phone ringing. It is the news we were hoping and praying for. We just can't wait to see him."

There had been concerns for Mr Shaw's health because he was on medication when he was snatched. But last night he was said to be in good health and returning to Tbilisi to be reunited with his Georgian girlfriend, Deanna Hrena, 28, and their three-year-old son, Danny.

Earlier this week the Labour MEP Glenys Kinnock joined the campaign for his release. She said: "This is fantastic news – I have spoken to Peter's family and they are ecstatic to hear that he is safe and well. It has been a terrible ordeal for the Shaws, but it is a story with a happy ending. We understand that Peter is in good health and at the moment that is all that matters. The finer details of just what happened will, I am sure, be revealed in due course. He has endured four and a half months of terrible uncertainty in circumstances we can't imagine."

Mr Shaw moved to Georgia six years ago as a senior banker involved in building up the agriculture industry with a multimillion-pound reform programme. In 1999 he set up the Georgian branch of the EU-sponsored bank Agro- Business. His work was rewarded with the British Consultancy Bureau's Man of the Year award.