Nairobi/Conakry - Guinea's prime minister has agreed to pay up to 12 years in back wages to soldiers in a bid to end a mutiny by rank-and-file troops who captured the deputy head of the army and shot the major in charge of army finances.

Prime Minister Ahmed Tidiane Souare, in a televised announcement late on Tuesday evening, said that every soldier would receive up to 5 million Guinean francs ($1 140), the BBC reported.

He also said that none of the mutineers would be punished and that soldiers arrested in connection with riots and protests against President Lansana Conte's rule in 2007 would be released.

Conte earlier in the day sacked Defence Minister Mamadou Bailo Diallo.

Protests began on Monday when soldiers seized General Mamadou Sampil, the deputy head of the army, as he went to negotiate with them at the Alfa Yaya Diallo base in the capital city Conakry.

Local website Horizon Guinee reported that Major Korka Diallo, the man in charge of army finances, was subsequently shot and seriously injured outside the base.

One person was killed and around 20 injured, mainly by stray bullets as soldiers fired their weapons into the air to mark their displeasure, local reports said.

Some soldiers were also reported to have looted shops as they took their protest to the streets.

The crisis was a baptism of fire for Souare, who was appointed last week following the sacking of Lansana Kouyate.

Opposition and trade union leaders were reportedly furious with Kouyate's sacking, and tensions have been high in the West African Nation.

Kouyate was appointed in 2007 in a move designed to end widespread unrest, in which over 100 people died.

Kouyate's departure was also believed to have been one of the triggers for the soldiers' mutiny, as they felt they could not negotiate with Souare, a close ally of Conte.

Conte took control of Guinea in a bloodless coup in 1984 and has since kept a tight grip on the nation.

He has won three presidential elections since restoring civilian rule in 1993, although he needed a referendum to change the constitution to remove a two-term limit on the president. - Sapa-dpa