Eleven People's War activists surrendered before Andhra Pradesh Director-General of Police Pervaram Ramulu on Wednesday.
Among them was PW Karimnagar district committee member Akula Indraiah alias Kiran, who was responsible for the blasting of a bus near Chintagudem in November 2002, which resulted in the death of 14 tribals.
Indraiah, 30, said he wanted to target policemen and not civilians.
He said after the incident the PW had 'suspended' him for six months.
Consequently, he got disillusioned with the PW and surrendered.
The others who gave up arms were Mohammed Rafath alias Saleem, 30; Rayarakula Rajitha, 28; Jigata Srinu, 21; Jadi Vijaya alias Razia; Vasari Sunrender, 25; Mamidi Ashok, 20; Sikkula Eshwari, 19; Chode Kumari alias Anitha, 18; Punem Babu Rao, 20 and Poovi Adilalsjmi, 20.
Three of them carried rewards of Rs 200,000 each on their heads while others had rewards of Rs 20,000 each.
Ramulu said they would be given the cash rewards announced on their heads, loans from the State Bank of India for starting small businesses, five acres of cultivable land and residential plots.
All thecases pending against them would be closed, the DGP said.
"Theywon't be hunted and haunted by the police. They won't be persecuted nor prosecuted. It is the state policy that in the larger interest of the people, we will close the cases against those who surrender," he said.
Asked how the police could let a person who had killed 14 people go scot-free, he said, "He will not face prosecution to ensure that he does not go back and kill 140people."
He said so far the government had spent Rs 15.25 crore [Rs 152.5 million]on rehabilitating naxalites who had surrendered.
"The government does not mind spending another Rs 100 crore this year if surrenders take place in large numbers," he said adding there were only 740activists left in the PW.
Meanwhile,two naxalites were killed in an encounter with the police in Nalgonda district on Wednesday.
TheDGP said that a police team, which was undertaking combing operations, had gone to a village in Choutuppal area. They were fired upon by naxalites hiding in a house. The police returned the fire and surrounded the house. Later, they found the dead bodies.