A fugitive father who had been hiding in New Zealand’s rugged wilderness with his three children for nearly four years has been shot dead by police investigating an armed burglary, police said on Monday.

The whereabouts of Tom Phillips has attracted headlines around the world since just before Christmas 2021, when he fled into the Waikato wilderness with his children Ember, now 9, Maverick, 10, and Jayda, 12, following a custody dispute with their mother.

Police, alerted to a burglary early on Monday, pursued two suspects on a quad bike before coming under fire from one of them from a high-powered rifle, authorities said. Police returned fire, killing the shooter, who they believe to be Phillips, pending formal identification.

Hours later, authorities located Phillips’s children, two of whom were believed to be in the wilderness, amid concerns they would be alone in temperatures that were forecast to reach freezing overnight.

Police deputy commissioner Jill Rogers said they were found at a local campsite, adding: “I can confirm that the children are well and uninjured, and they will be taken to a location this evening for medical checks.”

Earlier, Rogers said: “This has been a deeply traumatic incident this morning for those involved. It has been confronting and challenging in a small, rural, isolated location.”

Prime minister Christopher Luxon said the morning’s events were “sad and absolutely tragic”.

“This is not what anybody wanted to happen today and I think that is … a consistent feeling from everybody across New Zealand,” he told media on Monday afternoon.

In a statement to broadcaster RNZ, the mother of the three children, known as Cat, said she was relieved the ordeal had come to an end but was “saddened by how events had unfolded”.

“Our hope has always been that the children could be returned in a peaceful and safe way for everyone involved,” she said.

Rogers said police were called to a commercial property at 2.30am after reports of a burglary at a rural farm supply store in Piopio. “Information came to police that described two people on a quad bike, dressed in farm clothing and wearing headlamps,” Rogers said.

The quad bike was spotted travelling along a rural road, with items from the store attached. Police officers laid spikes at an intersection, which the quad bike ran over, she said. The quad bike came to a halt, which is when police came under fire, with one officer sustaining critical but survivable injuries.

“Our officer has been struck in the head … soon after a second patrol unit arrived and engaged the offender,” she said, adding the offender was given immediate first aid but died at the scene. “The formal identification of this male is yet to take place, but we believe him to be Tom Phillips.”

Rogers said one of his children was located at the scene, as well as multiple firearms. “The child located at the scene is being provided wrap around support, and we will not be providing any other comment at this time on their location.”

Specialist teams, including about 50 staff and the armed offenders squad, were out in force to locate the other two children, Rogers said on Monday afternoon, noting there were about three hours of daylight left.

“It will be down to freezing point, I would imagine, this evening,” the acting deputy commissioner said. “Hence we want this incident resolved as soon as possible.”

The police constable who suffered critical injuries is undergoing the first of many surgeries at hospital.

Cat expressed her concern for the police officer who was injured in the incident and to the community that had been affected. “Your compassion has sustained us,” she said.

The family would be working with government agencies to support the safe return and reconnection of the children, she said. “They have endured a long and difficult journey, and we ask for privacy as we help them adjust and reintegrate into a stable and loving environment.”

The mayor of Waitomo, John Robertson, told the Guardian it was the worst possible outcome for the community.

“I’m shattered, to be honest and there will be many in the community that are devastated that this was the outcome after three and a half, four years,” he said.

Robertson said the community was deeply concerned for the welfare of the children and he had hoped that the situation would have been resolved through negotiations with Phillips.

Phillips’ family and the family of the policeman would be deeply affected, he said.

“It’s just devastating news. Really the worst outcome we could have expected.”

The vast Waikato region, where Phillips was presumed hiding, is made up of long sweeping coastline to the west, forested terrain and farmland in the centre, limestone cave networks to the north and a smattering of small rural towns and settlements throughout.

Phillips came from a farming family in Marokopa – a tiny coastal settlement of less than 100 people that became inextricably linked with Phillips’s story.

The remoteness of the landscape frustrated police attempts to locate Phillips.

The case has fascinated New Zealanders, who have struggled to understand how, in a country of close-knit communities, Phillips could have evaded detection. While there was no suggestion his family helped Phillips, the question of how he managed to conceal himself and his three children – and survive – in the harsh terrain puzzled the nation, leading to speculation others in the community may have aided him.