A British banker working in eastern Europe has been kidnapped by armed men in a shoot-out with police.

Peter Shaw, 57, who was working in Georgia for the European Commission, was captured by seven men in the capital Tbilisi on Tuesday.

Georgia's President Eduard Shevardnadze has sent a letter to European Commission President Romano Prodi in connection with the kidnap.

The country's Interior Minister Koba Narchemashvili said it was possible Mr Shaw, who originally comes from Wales, had been abducted for ransom.

The kidnappers were armed and they started shooting

European Commission spokeswoman

The EC called on the Georgian police to hunt down the kidnappers.

Mr Narchemashvili said a car full of men dressed in fake police uniforms had approached Mr Shaw and demanded that he should follow them in his car.

"Then the police realised what was happening, and a gunfight broke out when another car with four armed men appeared at the scene," he said.

"Unfortunately, the kidnappers managed to escape with Shaw."

Chris Patten, commissioner for external affairs, urged the Georgian authorities to act "swiftly and rigorously".

He said incidents like this were of "deep concern" for the country's reputation.

At a government meeting on Wednesday, President Shevardnadze instructed the interior and security ministers and the prosecutor-general to ensure that Peter Shaw was freed in the next few days.

He told journalists the West had treated the incident with understanding.

A spokesman at the Foreign Office in London said it had been informed and officials were in contact with his family in Britain.

Colleagues' shock

Mr Shaw was an adviser at the Georgia office of Agro-Business Bank, part of a EC-sponsored development programme.

He was abducted less than 24 hours before the end of his contract.

A spokeswoman for the European Commission delegation which oversees such programmes said Mr Shaw had been in Georgia since 1996.

In 1997, he headed the EU Partnership Fund, which was set up to develop farming in the country.

The kidnap could embarrass the president

The fund issued loans to farmers through credit lines which it opened in commercial banks.

It is not known whether he intended to return to Britain when his work finished on Thursday.

The European Commission spokeswoman said colleagues were in shock and added: "We know that at about 6.30pm yesterday his car was blocked by two other cars and he was forced to stop."

"Apparently there was shooting and in the process of the shots somebody must have called the police who came but the kidnappers were armed and they started shooting and the police lost the kidnappers, Mr Shaw and the cars."

It is believed Mr Shaw lived alone in Georgia and was divorced.

His former wife still lives in Britain with their children.

The spokeswoman said he originally went to school in Maesteg, Mid Glamorgan.

Kidnapping has become more common in the volatile former Soviet republic over the last two years, especially on the border of breakaway Russian state Chechnya.

It is an embarrassment for Georgian President Eduard Shevardnadze, who is trying to lure western investment to the region.