Nearly four months after he was kidnapped at gunpoint, BBC journalist Alan Johnston was released on Wednesday in Gaza following an agreement between his abductors and the Islamist Hamas movement.

The BBC reporter was handed over to officials of the Hamas administration in the early hours of Wednesday.

Describing his abduction as an 'appalling experience,' Johnston, 45, said it was 'fantastic' to be free.

'He was freed following an agreement with his kidnappers and he is in good health,' a Hamas statement said.

Johnston, an award-winning journalist, was the only Western reporter still based permanently in the Gaza Strip when he was snatched at gunpoint on March 12.

The Army of Islam, the extremist group, which claimed to have kidnapped the reporter, had threatened to kill him if any rescue attempt is made.

On June 24, Johnston appeared in a video, saying he was wearing a bomb-belt that his captors would detonate if there was any attempt to rescue him.

The kidnappers had demanded the release of prisoners held in Britain and Jordan, have accused Hamas of exerting undue pressure for Johnston's release in spiralling tensions between the two groups.

Appearing outside the house of Hamas Prime Minister Ismail Haniya, Johnston said he had been unable to see the sun for three months, and was once chained for 24 hours.

"I literally dreamt many times of being free and always woke up back in that room," he said.

Johnston said he was not tortured during captivity but he did fall ill from the food he was served.

Rallies worldwide had called for Johnston's release. An online petition was signed by some 200,000 people.

Hamas' military wing had said it would actively work towards securing Johnston's release, warning his kidnappers it was prepared to use force.

Gunmen from the Palestinian Islamist Hamas movement overran Gaza last month, expelling their rivals from the Fatah faction.

Fatah's defeat in Gaza prompted its leader, Palestinian Authority President Mahmoud Abbas, to sack Haniya as prime minister.

A senior Hamas official, Mahmoud Zahar, said Hamas did not work towards the release 'to receive favours from the British government.'

'We did this because of humanitarian concern, and to achieve a government aim to extend security to all without fear,' the statement said.

Hamas fighters on Tuesday fought gun-battles with Army of Islam militants in the Gaza suburb where Johnston was believed to be held, Hamas and witnesses said.

The clashes came after members of Hamas's armed wing set up checkpoints at the entrance to the Sabra neighbourhood, searching vehicles and fanning out around a compound, witnesses said.