Gunfire broke out near Guinea-Bissau’s presidential palace overnight and continued on Friday morning after soldiers freed a minister from the main opposition party detained for suspected misuse of public funds, a police source said.

Gunshots were first heard around 23H00 GMT about two kilometres away from the presidential palace. An apparent exchange of fire was also heard after midnight in the neighbourhood of Antula, on the outskirts of the capital, where an army general lives.

Military vehicles were on the streets on Friday morning as residents commuted to work and school. Gunshots could still be heard but were less frequent than during the night. Another reporter heard gunshots not far from the presidential palace.

According to the AFP, quoting military and intelligence sources, members of the National Guard freed finance minister Souleiman Seidi and treasury secretary Antonio Monteiro from police custody. The duo had been taken in for questioning on Thursday morning about the reported withdrawal of $10m from state coffers.

Their whereabouts are currently unknown.

Seidi is a member of the former ruling PAIGC party, which leads the coalition that won a majority in legislative elections in June.

The gunfire was between soldiers in the Guard and special forces.

Later on Friday, a spokesman to Guinea-Bissau’s army chief of staff said the leader of the security forces unit involved in the overnight clashes has been apprehended.