A 22-year-old British tourist has been shot dead as he danced at a New Year party on one of Thailand's most famous islands after a fight between rival Thai gangs erupted on the beach, police say.

The holidaymaker was killed when a Thai man opened fire at a bar on the island of Koh Phangan in southern Thailand in the early hours of Tuesday morning.

"He was shot in the side while he was dancing on the beach," local policeman Lieutenant Colonel Somsak Noorod said, adding the area had been packed with revellers during the evening's New Year celebrations.

Police believe the gunman was aiming at members of a rival gang.

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