Pakistani Taliban today suffered a major setback after a powerful faction split from it citing the umbrella organisation's involvement in criminal activities and bombing of public places, complicating the already-fragile peace dialogue with the government.

The 'Khan Sajna' group has parted ways from the Tehrik-e-Taliban Pakistan (TTP) led by Maulana Fazlullah due to its involvement in criminal activities and policy of bombing public places, Azam Tariq, former TTP spokesman and a member of its powerful shura (council), said.

"We announce our defection from the Tehreek-e-Taliban Pakistan, we have chosen our Khalid Mehsud as the new leader for South Waziristan," Tariq said.

"The TTP leadership has fallen into the hands of a bunch of conspirators, the umbrella organisation is involved in criminal activities like robbery and extortion," he said in a statement.

"Khalid Mehsud" known as "Khan Said Sajna" was a contender for the TTP's leadership after its former chief Hakimullah Mehsud was killed in a US drone strike last year.

The break-away faction belongs to the Mehsud tribe, considered to be one of the most important and powerful of the various groups that comprise the TTP.

Tariq said there were differences within the rebels over the issue of peace talks with the government, which are currently stalled. He said the TTP needs reforms.

The split has come at time when the Taliban are facing aerial strikes by the government forces and their leader Fazlullah, hiding in Afghanistan, is trying to assert his authority.

He had removed Sajna as chief of South Waziristan over fighting with another group led by Shehyar Mehsud but Sajna refused to relinquish his position.

More than 50 rebels were killed due to fighting between Sajna and Shehyar groups in the previous weeks.

It is not know whether intelligence agencies had a hand in the split.

Pakistani air force jets last week pounded Taliban targets in the country's restive tribal region near the Afghan border.

The death toll in the air strikes and targeted on ground offensives has crossed 80, with over 75 militants and four security personnel among those killed.