An Italian Red Cross worker has been freed after six months captivity in the Philippines jungle by al-Qaeda linked militants.

Gaunt and haggard, Eugenio Vagni, 62, told reporters that although he had been treated well by the Abu Sayyaf rebels who captured him, he constantly feared being beheaded.

In his darkest moments during his months in the jungle, he imagined seeing "my head in a big basket," the aid worker told Philippines television station ABS-CBN.

Mr Vagni, who suffers from hypertension and a hernia, was kidnapped along with two Red Cross colleagues as they inspected a water project on Jolo island in the Philippines' restive south, and held for 179 days in harsh, rugged terrain.

He was eventually handed over to a provincial vice-governor shortly after midnight yesterday in jungle near Maimbung township on Jolo, two months after his Swiss and Filipinio fellow hostages were released under unexplained circumstances.

At a press conference after his release early yesterday, Mr Vagni was at times emotional as he thanked the Philippine military and local officials for working to free him.

"I am happy because I am free. I thank all the people that led to this happening," MrVagni said, struggling to remain composed as he talked of his excitement at seeing his Thai wife and family, including his one-year-old daughter.

"I thought it would never happen. I called my wife, and I told her, 'I love you,'"

Mr Vagni, who lost about 44 pounds (20 kilograms) on a diet of rice and fish, said he was treated well by his captors, who called him 'Apo' a term of respect for the elderly.The militants helped treat his cholera and carried his backpack when he got tired, but that did not ease his constant fear of being beheaded. he said.

He also extended his condolences to the families of several soldiers who died in clashes with Abu Sayyaf rebels as they tried to free him.

Anastasia Isyuk, a spokeswoman for the International Committee of the Red Cross (ICRC), said that Mr Vagni was doing "remarkably well" despite his ordeal and concerns for his health.

The spokeswoman declined to discuss the terms of his release, but emphasised that the international aid agency did not pay a ransom for his release.

ABS-CBN television quoted unnamed sources saying that Mr Vagni would be swapped for the two wives of Abu Sayyaf leader Albader Parad, who were arrested with four other kidnapping suspects in Jolo on Tuesday.

Franco Frattini, the Italian Foreign Minister, said in an interview with Italian television that no ransom had been paid for Mr Vagni's release.

However, the Philippines government negotiator, Sulu Vice-Governo Lady Ann Sahidulla, said she gave $1,042 to the militants "for cigarettes" and handed over to Abu Sayyaf commander Albader Parad one of his wives, who was arrested last week by troops on suspicion that she aided militants in kidnappings.

Ms Sahidulla added that she also allowed another arrested wife of Parad to return home, saying there was no strong evidence linking the women to any crime.

She said it was not a "prisoner swap," adding that one of the wives helped her to convince Mr Parad to free Mr Vagni, telling him that many militants and troops had died due to the abductions.

"Skilful negotiations and incessant pressure by relentless operations ... won the release of Vagni," Lieutenant-Colonel Edgard Arevalo, a Philippine Marine spokesman, said.

He said that offensives against Abu Sayyaf would continue in Jolo, an impoverished, mostly Muslim region 590 miles (950 kilometres) south of Manila.

Abu Sayyaf, which has about 400 fighters, is on the US list of terrorist organisations because of the bombings, ransom kidnappings and beheadings of hostages that have destabilised the southern Philippines for decades.

The group is suspected of receiving funds and training from al-Qaeda and from the militant Jemaah Islamiyah network that was blamed for the bombing on the Indonesian island of Bali in 2002 which claimed the lives of 202 people from 22 countries, including 88 Australians.

The militants have turned to kidnappings in recent years, raising concerns among Philippine and US security officials that ransom payments could revive the group, which has been weakened by years of US-backed offensives.

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