Maoist rebels free Italian tour guide Paolo Bosusco

NEW DELHI (Reuters) - Maoist rebels freed Italian tour guide Paolo Bosusco on Thursday, almost a month after kidnapping him in a remote part of Orissa in what was believed to be the first seizure of a foreigner by the leftist guerrillas.

Also known as Naxals, the rebels have fought for decades in a swathe of central and eastern India, including many resource-rich regions, where tension runs high between poor farmers and industrial developers.

Television footage showed Bosusco, in a pink T-shirt and beige trousers torn at the knees, carrying a black rucksack on his shoulders as he walked through villages. He later arrived in Bhubaneshwar.

"I am finally free," Bosusco said by telephone to Italian state-owned RAI television. "I am strong, it's all finished and everything is OK."

In response to rebel demands, the authorities freed a Maoist leader's wife from prison and promised to facilitate the release of several imprisoned rebels and their supporters.

Bosusco was handed to a mediator who had travelled to a remote camp where he was being held late on Wednesday. The Italian Foreign Ministry said Indian authorities had informed the ambassador of the release.

Bosusco was seized in Orissa, along with another Italian, Claudio Colangelo, on March 14 during a visit to indigenous tribes. Colangelo was handed to a group of reporters on March 25.

The fighters said they detained the Italians because they were taking photographs of tribeswomen bathing in a river, an accusation Colangelo denied after his release.

Prime Minister Manmohan Singh calls the Maoists India's main internal security threat and an obstacle to higher growth and more jobs in Asia's third-largest economy.

Hundreds of people are killed every year in the conflict, although levels of violence have fallen in recent years.

On March 24, another group of Maoists kidnapped Jhina Hikaka, a state legislator, adding to the tension.

The Maoists say they are fighting for the rights of millions of landless tribal people. Apart from prisoner releases, the Orissa Maoists have also demanded an end to tourism in parts of the state where tribal people live.

(Additional reporting by Catherine Hornby in ROME; Editing by Frank Jack Daniel and Satarupa Bhattacharjya; Editing by Sanjeev Miglani and Robert Birsel)