Two demonstrators were shot dead and several more were wounded at Karachi's international airport on Tuesday when clashes broke out between security forces and staff from the national airline protesting privatisation plans, officials said.

Police and paramilitary rangers deployed tear gas and water cannon against the protesters from Pakistan International Airlines after they blocked the main entrance to Karachi's Jinnah International Airport around midday.

Gunfire later erupted, although the source of the shots was unclear. Both law enforcement agencies denied they had shot at protesters.

Dr Seemi Jamali, a spokeswoman for the government-run Jinnah Postgraduate Medical Center, told AFP the hospital had received a total of 10 wounded, one of whom later died.

"Four people with gunshot wounds were brought to the hospital, one succumbed to his injuries while the other three are in stable condition," she said. Six others, among them journalists who had been covering the protest, were treated for other injuries.

Another employee, who had also been shot, was taken to the private Aga Khan University Hospital, where he was pronounced dead on arrival.

"The PIA employee was brought dead to our emergency department and our team attempted to revive him for 20 minutes," a spokesman of the hospital told AFP, identifying the deceased as Inayat Raza.

Nadeem Jaffer, a colleague and friend of Raza, confirmed his death at the hospital.

Kamran Fazal, the police chief of the city's eastern district said: "The situation escalated when a couple of gunshots were fired. My officers told me that they might be fired from the crowd.

"We are searching for the empty shells and only then can we establish who opened fire."

The PIA employees' union had announced a day earlier its plans to shut down the airline's flights after weeks of token strikes against government proposals to complete the partial sale of the carrier by July.

The move follows years of crushing losses and mismanagement that have battered the airline's reputation.

PIA suffers from frequent cancellations and delays and has been involved in numerous controversies over the years, including the jailing of a drunk pilot in Britain in 2013.

The airline has also traditionally handed out tens of thousands of free tickets each year, contributing to its losses.