A pensioner who had been holding a five-year-old boy hostage for a week was shot dead and his captive freed in a dramatic end to a week-long siege.

Retired trucker and Vietnam veteran Jimmy Lee Dykes had been holed up with the child – who escaped unharmed – in an underground bunker in rural Alabama.

But after negotiations with the kidnapper broke down last night, police feared the youngster would be killed and moved to end the siege.

It was unclear whether Dykes, 65, had been shot dead by agents or took his own life.

FBI agent Steve Richardson said: "Agents safely recovered the child who was being held hostage for nearly a week.

"Within the past 24 hours negotiations deteriorated and Mr Dykes was observed holding a gun.

"At this point FBI agents fearing the child was in imminent danger entered the bunker and rescued the child."

He added that the child, who had been snatched after boarding a school bus near his home, was being cared for at a local hospital. The bus driver had been shot dead by Dykes.

The drama in Midland City came amid heightened concerns about gun violence and school safety across the United States after deaths of 20 children and six adults in Connecticut before Christmas.

In Washington yesterday, President Barack Obama pressed Congress to at least hold a vote on banning assault weapons, the most contentious part of his plan to curb gun violence.