The children, aged between seven and 12, were brought from Humla, an inaccessible and mountainous district in northern Nepal lacking access to healthcare, education and job opportunities, to the Kathmandu valley by a man running an illegal centre, media reports said.

Jaya Ram Rawat was running the Poor and Underprivileged Service Centre in Thankot, an organisation not registered with the government.

He had offered the children's parents to take the youngsters to the capital and facilitate their education and had taken money from the families, private FM station Himalayan Broadcasting Centre said Sunday.

Though he enrolled some of the children in a school, they were actually put to beg, the radio station said.

In April, when Nepal erupted in protests against the rule of King Gyanendra and demonstrators shut down the nation for 19 days, the children could not beg as the streets were filled with violence with security forces swooping down on demonstrators.

As they failed to bring back any money, the centre began starving them. Since April 6, the children - 17 boys and seven girls - had been living on two fistfuls of beaten rice a day, reports said. They were severely malnourished with some suffering from abscesses.

The children's plight came to light after a teacher at the school where some of them had been enrolled, became suspicious and informed the authorities.

Police and officials of the District Child Welfare Committee raided the centre Friday and rescued the children. They were living in a pitiable condition in a broken down house, the reports said. The owner of the centre however fled and is still at large.

Three of the rescued children had to be hospitalised.

This is not the first time the Oliver Twist story has been re-enacted in Nepal. One of the poorest countries in the world with a low literacy rate, Nepal has a thriving racket in childcare centres.

The owners bring children from the outer districts after promising parents they would be educated and taking money or gather abandoned children to get a government dole and pocket the money, forcing the children to live in abject conditions.