British Chris McManus and Italian Franco Lamolinara, who were taken hostages in Nigeria, have been killed by their captors yesterday when a UK Special Forces rescue operation ended in tragedy.

Chris McManus and Franco Lamolinara have been executed by gunmen as members of the Special Boat Service and Nigerian soldiers moved in on the Al Qaeda-inspired terrorists’ hideaway.

Chris McManus and Franco Lamolinara had been held for ten months.

Fears for Christopher McManus’s welfare had intensified following the release of a video in August showing the 28-year-old engineer blindfolded alongside three armed men.

One of the terrorists said it would be the “last message” to David Cameron about the hostage.

Yesterday, British PM David Cameron broke the news of the execution to Chris McManus’s family in a personal phone call before making a public statement in which he appeared emotional.

It is the second time David Cameron has ordered a hostage rescue mission that has failed. Scottish aid worker Linda Norgrove died when Special Forces tried to rescue her from the Taliban in Afghanistan.

David Cameron had also telephoned his Italian counterpart Mario Monti to tell him of the failed operation – but last night there was growing anger in Italy as it became clear that Rome was informed of the raid to free the hostages only once it had got underway.

Further details of the rescue bid were emerging last night, but it remained unknown whether Christopher McManus and Franco Lamolinara – a 48-year-old father of two – died before or during the operation.

There were reports the men may have been held in a house in Sokoto, a city in Nigeria’s north-west.

One witness said: “The security agencies tried to break into the house but there was resistance. The people inside the house were shooting at them and they returned fire.”

British Chris McManus (left) and Italian Franco Lamolinara have been killed by their captors in Nigeria yesterday when a UK Special Forces rescue operation ended in tragedy

None of the 20 strong British rescue force was injured and Nigerian president Goodluck Jonathan said all the terrorists had been arrested.

The rescue was triggered when – after months of searching – the SBS found the heavily protected location where the men were being held.

PM David Cameron said authorities had decided to go ahead with the rescue after receiving “credible information about [the men’s] location”.

“A window of opportunity arose to secure their release. We also had reason to believe that their lives were under imminent and growing danger,” David Cameron insisted.

David Cameron said it was “with great regret’ that he had to announce Chris McManus, from Oldham, and Franco Lamolinara had lost their lives in the subsequent operation.

“I am very sorry that this ended so tragically,” David Cameron stressed, adding: “Terrorism and appalling crimes such as these are a scourge on our world. No one should be in any doubt about our determination to fight and to defeat them.”

Christopher McManus, a contract worker for an Italian construction company, was kidnapped by gunmen in May last year after they stormed his apartment in Birnin-Kebbi in the north-west of Nigeria.

Franco Lamolinara, a 48-year-old father of two of Gattinara near Turin, was also taken. A German colleague escaped by scaling a wall despite being shot and injured.

Last night Chris McManus’s parents, two brothers and sister issued a statement thanking all involved in the attempted rescue.

The statement said: “We are of course devastated by the news of Chris’s death, which we received earlier today.

“During this ordeal we have relied heavily on the support of our family and friends which has never waned and has enabled us to get through the most difficult of times.

“We are also aware of the many people who were working to try and have Chris returned to our family, and his girlfriend. We would like to thank all of them for their efforts.”

The family said they were confident “everything that could be done was being done’ during their ten-month ordeal and sent their condolences to relatives of the other dead hostage”.

Chris McManus and Franco Lamolinara had been working on building a bank in the city, the capital of the lawless Kebbi province.

In August a Nigerian group calling itself “Al Qaeda in the land beyond the Sahel” claimed responsibility for the kidnap and released the video showing Chris McManus, in a Manchester United shirt, with three men armed with Kalashnikov rifles and a machete.

Chris McManus pleaded for the British Government to answer the demands of the group to save his life. One of the kidnappers then said the British Government had failed to answer its demands and it was given two weeks to “take the correct decision”.

Yesterday, security officials said they believed the kidnappers were from a splinter group of the Islamist militant group Boko Haram, which has links to Al Qaeda.

Sources said British Ministry of Defence officials approached David Cameron on Wednesday evening and made it clear they believed there was a “time-limited opportunity” to mount an attempt to free the men.

David Cameron took the decision to go ahead and then followed the operation “in real time” yesterday morning. A meeting of the Government’s emergency committee Cobra was convened, but word came back that the two men had been killed by their captors.

The Italian prime minister’s office said that it had been “constantly in touch with British authorities but that the operation had got underway with the Nigerians and British forces with Italy informed once it had begun”.

Former Italian Prime Minister Massimo D’Alema said: “I want full light to be shed on why Italy was only informed once the operation had started.”

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