'Highly dangerous' men on run after 'inside job' jailbreak in Paraguay

More than 70 prisoners, including members of Brazil's most powerful gang, have escaped from a jail in Paraguay after digging a tunnel.

Cells filled with as many as 200 bags of earth were found as the government claimed some prison officials were believed to have known about the operation in the city of Pedro Juan Caballero.

The facility's director was fired along with six other prison officials following Sunday's breakout by 75 inmates near the Brazilian border, Paraguay's justice minister Cecilia Perez said.

She told radio station Monumental: "It's an operation that took days and it is impossible that the officials did not realise that they were leaving... obviously this was a paid plan."

Interior minister Euclides Acevedo said the tunnel could have been used to cover up complicity by prison officials and many inmates may have been allowed to walk out of the main gate.

He said the majority of the escapees were members of the First Capital Command (PCC) gang based in Brazil, which borders Pedro Juan Caballero.

Brazilian authorities said 40 of the escapees were from Brazil, and said they had passed their names and photos to border police.

The gang was established inside a Sao Paulo prison in the 1990s and has extended its influence throughout the country, becoming one of Brazil's largest criminal organisations.

The border region near Pedro Juan Caballero is seen as a transit point for drug trafficking and other criminal activity by gangs like Brazil's PCC and Comando Vermelho, also known as Red Command.

Paraguay's government said it had alerted Brazil's federal police, but the prisoners were believed to still be in Paraguay.

"In that area, there are many woods and they know the territory... these are highly dangerous people," Paraguayan attorney general Sandra Quinonez told Monumental.

At least one Paraguayan prisoner has already been captured, according to reports. The man was found in a private house in the San Juan neighbourhood near the prison.

The government of the neighbouring Brazilian state of Mato Grosso do Sul has stepped up security along the border.

Brazilian justice minister Sergio Moro said he was prepared to help Paraguay recapture the escapees and was working with Paraguay to stop them re-entering Brazil.

"If they return to Brazil, they will get a one-way ticket to a federal penitentiary," he said on Twitter.