PATNA, India - Indian Maoist rebels in the east of the country executed a captured policeman and threatened to kill three others as they stepped up their demands on Friday for the release of eight prisoners.

Police said they had recovered the body of policeman Lucas Tete in an isolated forested district of Lakhisarai, in the eastern state of Bihar, about 150 kilometres (100 miles) from the state capital Patna.

"We will kill the three other policemen and send their bodies soon," read a hand-written note found near the body, local policeman Shaharukh Majeed told AFP by telephone.

Search parties assisted by helicopters fanned out over the area where the policemen are thought to be held, but the dense forest, hills and risks of operating in Maoist-infested areas made progress slow.

Late Thursday, the rebels claimed they had executed one of their hostages who were seized during a raid on security forces on Sunday that left 10 policemen dead.

The name of the executed policeman had initially been given as Kumar Yadav.

"We killed him and warned the state government to release our comrades by 10:00am (0430 GMT) on Friday morning. Failing this we will kill all three policemen," Maoist spokesman Avinash told local Hindi TV news channels on Thursday evening.

The rebels are demanding the freedom of eight Maoist prisoners and that security forces be withdrawn from their areas in Bihar in exchange for the release of the policemen.

The hostage crisis is seen as a major test for Bihar Chief Minister Nitish Kumar, who is widely credited with improving the economic fortunes of deeply deprived Bihar.

Kumar has favoured dialogue and development over a hardline strategy of trying to crush the Maoist movement, which has been described by Prime Minister Manmohan Singh as India's biggest internal security threat.

Authorities in New Delhi launched a major offensive last year to tackle the worsening insurgency, but since then the Maoists have hit back with repeated strikes against police and paramilitary forces.

The chief minister held a meeting with top officials on Friday to chalk out a strategy to rescue the abducted policemen.

An official in the home ministry said federal forces were on hand to assist with the rescue efforts.

"This is being handled by the state and we are giving them full support whatever they are asking for," senior home ministry official Kashmir Singh was quoted as saying by the Press Trust of India news agency.

"We gave one helicopter yesterday and another is going today and whatever force is available it is being made available to them," he said.

The Maoist or Naxal movement, as it is known locally, began in 1967 in West Bengal but has since spread to 20 out of India's 29 states.

The movement feeds off land disputes, police brutality and corruption and is strongest in the poorest and most deprived areas of India, which are often rich in natural resources.