Seven labourers were late on Wednesday night shot dead in Nawada district in what is believed to be the fallout of a business dispute, police said on Thursday.

Around 25 armed men raided Dariapur village, about 15km from Nawada, and opened indiscriminate fire killing five people on the spot, police said.

Earlier, they had gone to adjoining Rampur-Ganeshnagar village and shot dead two labourers, they said.

According to the villagers, the marauders were looking for dreaded gangster Ashok Mahato who had escaped from Nawada jail a few months ago.

All those killed were said to be labourers working for Mahato, who has stakes in sand mining in the region and police suspect the killing was the result of his running feud with jailed gangster Akhilesh Singh, who is also engaged in the trade.

Akhilesh Singh is the husband of independent MLA from Warsliganj Aruna Devi.

This business rivalry has over the last several years claimed several lives on both sides.

Senior district officials rushed to the spot and efforts were on to apprehend the killers.