In a major setback to the Naxalite movement in Andhra Pradesh, top Maoist leader Sudarshan, who carried a reward of Rs 3 lakh on his head, was killed, along with two others, in an encounter with the police in a forest in Anantapur district on Friday.

The exchange of fire took place in Goonepalli forest area near Bukkapatnam village in the district, police said in Hyderabad.

A team of Grey Hounds, the elite anti-Naxalite force, was engaged in combing operations when it encountered the Maoists in their forest hideout.

In the fierce gunbattle that followed, three extremists were killed, including the secretary of Nallamala Forest Division Committee of the outlawed Communist Party of India (Maoist) Sudarshan alias Satyam.

Sudarshan was wanted in connection with several incidents including the attack on Prakasam District Superintendent of Police Mahesh Kumar Ladda early this year.

A native of Warangal district, Sudarshan was involved in 20 criminal cases in Prakasam district alone. He had also worked as Nalgonda District Committee secretary of People's War Group.

Meanwhile, Gadar, the revolutionary balladeer and former Naxal emissary during peace talks with government, dubbed the encounter as "fake" and warned that people would "teach a lesson" to ruling Congress.