Briton, Italian die as Nigeria hostage rescue fails

LAGOS (Reuters) - A Briton and an Italian held hostage in Nigeria were killed by their captors on Thursday as a joint British-Nigerian rescue mission stormed a compound to try to free the men, witnesses and security officials said.

Prime Minister David Cameron said he had authorised the Britain's involvement in the rescue attempt after being told the men's lives were in "imminent and growing danger".

Briton Chris McManus and Italian Franco Lamolinara, were working for a construction company when they were seized in May from their accommodation in Kebbi state, near Nigeria's northwestern borders with Niger and Benin.

A witness told Reuters that security forces had tried to force their way into a compound in Sokoto, northwest Nigeria.

"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. They exchanged fire for some time," said Mahmoud Abubakar, who lives on the same street.

"I saw a military truck come out of the compound with two bodies on it. I didn't see their colour, because they were covered with leaves," he added.

The captors were a faction of militant Islamist sect Boko Haram, a senior official at Nigeria's State Security Service said.

"The hostage-takers shot the hostages before they even entered the compound. All the terrorists have been killed as well," he said. "We arrested some suspects a few days before who led us to them."

British special forces were involved in the rescue, UK media reports said.

"We are still awaiting confirmation of the details, but the early indications are clear that both men were murdered by their captors, before they could be rescued," Cameron said in London.

He said he had approved British involvement in the operation but the Italian government said it had only been informed about the rescue bid after it had begun.

It said Cameron had called Italian Prime Minister Mario Monti to inform him of the "tragic conclusion" of the operation.

The hostages had been shown in a short video that emerged last August saying they were being held by al Qaeda, although this could not be independently verified at the time.

The video showed the two men blindfolded and on their knees, while three armed men stood behind them, their faces hidden.

Relatives of McManus said they were devastated by his death. "We knew Chris was in an extremely dangerous situation. However we knew that everything that could be done was being done," his family said in a joint statement.

Lamolinara, an engineer, had been in Nigeria for a decade before being kidnapped, and was helping to construct a building for the central bank, according to Italy's Ansa news agency.

(Additional Reporting by Tim Cocks and Peter Griffiths in London, Steve Scherer in Rome, Camillus Eboh in Abuja and Farouk Umar in Sokoto; Editing by Andrew Heavens and Jon Boyle)