British and Italian hostages killed in Nigeria

A video grab showing Chris McManus surrounded by suspected terrorists in Nigeria. David Cameron has confirmed that the British national has been killed. Photograph: Str/AFP/Getty Images

A British construction worker and an Italian colleague have been murdered by terrorists in north west Nigeria after being taken hostage in May last year.

David Cameron confirmed the death of Chris McManus and Franco Lamolinara, who were working for an Italian construction firm, after authorising a rescue mission.

The prime minister said it appeared the two men were murdered by their captors before they could be rescued. The captors posted a video, featuring the men, which warned that they would be killed.

The attempted rescue was mounted by British special forces in an intelligence-led operation planned in close cooperation with the Nigerian authorities, well-placed Whitehall sources said.

A unit of the Special Boat Service (SBS) tried to free the men "after a window of opportunity presented itself", said an official familiar with the incident.

"The operation was based on good intelligence – the location was right", a source added. The SBS team was told to go in when it appeared that Chris McManus and Franco Lamolinara were judged to be in imminent danger.

"That was the imperative which drove the operation", the Whitehall sources said. They described the men's captors as among the "nastiestal-Qaida affiliated terrorists there are".

Officials said the operation was planned in advance in the knowledge that the rescuers had to move quickly when intelligence pointed to an opportunity to free the men. But it was clear any attempt to free the men was going to be risky.

Units of SBS and the Special Air Service – the SAS – are specifically trained to undertake counter-terrorist operations.

The men may have been held in Sokoto, a city in Nigeria's north west, according to Associated Press.

There were reports of a house being surrounded by military and the sounds of gunfire heard before an ambulance was called. Security forces had also set up a cordon around the site.