The game has thousands of players in China

Shanghai gamer Qiu Chengwei killed player Zhu Caoyuan when he discovered he had sold a "dragon sabre" he had been loaned, said the china Daily.

Mr Chengwei only got the powerful virtual weapon shortly before it was sold for 7,200 yuan (£460).

Before the attack Mr Chengwei told police about the theft who said the weapon was not real property.

Missing law

Like many online games Legends of Mir 3 is set in a fantasy world in which players take on the roles of warriors, wizards and priests.

As in-game characters rack up experience in the game they become able to use more powerful weapons such as the "dragon sabre" at the centre of the row.

A long-time player of Legends of Mir 3, Mr Chengwei reportedly only got hold of the powerful sword in February.

Although Mr Caoyuan said he would hand over the money from the sale of the sword, Mr Chengwei lost patience and attacked him in real life.

The China Daily said Mr Caoyuan was stabbed with "great force" in the left chest and killed.

The row is thought to have blown up partly because China has no laws that cover the theft of virtual in-game items.

This is in contrast to places like South Korea which has a section of its police force that investigates in-game crime.

Many of the magic weapons, armour, artefacts and money from online games, such as EverQuest and Ultima Online, change hands for large sums of money.

At any one time millions of dollars in game items are being traded on places like eBay or specialised sites.

Mr Chengwei has given himself up to police and confessed to "intentional injury" but it is not clear what he has been charged with.

The China Daily said that increasing numbers of players were going to court to resolve disputes over stolen money and game items.