Australia's most wanted man was captured holed-up in a lonely mountain cabin on Thursday after seven years on the run during which time he lived in rugged wilderness often like an animal.

Malcolm Naden, an Aboriginal bush survival expert and murder suspect, had been compared with Australia's most famous 19th century bushranger Ned Kelly for his ability to elude police, at one stage narrowly escaping after shootout at a farmhouse.

Naden, 38, often broke into empty, isolated farmhouses to gain supplies before returning to inaccessible bushland, but in the early hours of Thursday the cat and mouse game ended when police surrounded a house in the rugged Barrington Tops a few hours drive north of Sydney.

Despite being surrounded by heavily armed police Naden made a dash to escape, but was brought down by a police dog which dragged him to the ground by his leg.

Today Australia's most wanted man was behind bars, New South Wales (NSW) Police Commissioner Andrew Scipione told reporters in Sydney.

Photographs of the capture Naden showed him sitting under a tree, hands and legs handcuffed, wet and covered in mud, his legs bandaged and sporting a long beard, reminiscent of Australia's bushrangers or outlaws.

Naden, a former abattoir worker, has been on the run since 2005 when the body of his cousin was found in a bedroom of his family's home. He is a suspect in her murder and another in the same year and has been questioned about an indecent assault of a 15-year-old girl in 2004 and the shooting of a police officer.

After the 2011 shooting of the police officer, the bounty on Naden's head was lifted to AU$250,000 (165,375 pounds).

During his time on the run Naden hid in a zoo for several weeks where he stole meat and rotting fruit left out for the animals. Naden spent so long in the bush that it became difficult for police dogs to pick up his sent.

At times police missed capturing Naden by only hours. Finally, a tip off led 20 police to an isolated farmhouse which Naden had used before.

That was something that was quite common to his movements, that he was often going back to the same residence where he'd done break-and-enters over a period of years, often using similar tracks that we thought he was travelling along, said a police assistant commissioner Carlene York.

Police said Naden was expected to appear in court on charges of murder and indecent assault later on Thursday.

(Reporting By Maggie Lu YueYang; EdIting by Michael Perry)