Port Moresby: Reports a live dinosaur had been sighted on a volcanic island of Papua New Guinea prompted the deployment of heavily-armed police in search of the mystery creature.

Villagers in the superstitious island province of East New Britain this week said they fled in terror after seeing a three-metre tall, grey-coloured creature with a head like a dog and a tail like a crocodile.

They said the creature was living among thick green plants in a mosquito-ridden marsh just outside the provincial capital Kokopo, near the devastated town of Rabaul which was buried by a volcanic eruption in 1994.

Kokopo’s Mayor Albert Buanga said the dinosaur would make a great a tourist attraction, if it existed.

A government official today confirmed police carrying M-16s and shotguns searched the area but found no trace of the creature.

Eyewitness Christine Samei told reporters she ran for her life after seeing a three-metre tall, grey creature with a head like a dog and a tail like a crocodile which was as fat as a 900-litre water tank.

“It’s a very huge and ugly looking animal,” Samei told local media.

A government official said the villagers had identified the creature from books and movies about dinosaurs.

“They told us it was a dinosaur,” the official told AAP.

Although police found no trace of the creature, Senior Sergeant Leuth Nidung warned villagers to take extra precautions when going about their daily business, amid reports it had eaten three dogs.

Villagers were told to report any further sightings immediately to police, who were already organising a more thorough search of the area.

Black magic and other superstitions are common in many parts of PNG’s predominantly village-based society.

Each year large numbers of foreigners visit the area to see World War II relics as well as the devastated town of Rabaul – the only urban centre in the world built inside the crater of a giant volcano.