Five British nationals and one UK resident are dead or unaccounted for, Foreign Secretary William Hague said, after Algerian special forces launched a final assault on the besieged BP gas plant.

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According to other reports seven hostages were killed as Algerian special forces mounted a final assault on the Islamist militants holding out in the desert gas plant.

The Algerian state news agency APS quoted a security source as saying that the hostages who died were killed by their captors. There was no immediate information on the nationalities of those killed.

The APS also reported that 11 terrorists died in the battle at the remote desert plant at In Almenas.

Prior to the assault there were reports that 16 of the remaining foreign hostages had been freed - including two Americans, two Germans and one Portuguese.

Six Britons at the plant remain "at risk or unaccounted for", Foreign Secretary William Hague said today. Mr Hague added that the country should be prepared for more "bad news".

BP chief executive Bob Dudley said the company was "unable to confirm the location or situation" of four employees at In Amenas and had "grave fears" that they are likely to have suffered fatalities.

The Algerian military controlled the vast residential barracks, while gunmen were in the industrial plant itself with an undisclosed number of hostages, Reuters reported.

Seven hostages and eleven terrorists are killed at the BP plant in Almenas, Algeria (Image: Reuters)

The Foreign Office said in a statement: "The Algerian authorities have confirmed to us that the military phase of the operation to resolve this crisis has concluded. The site is still being made safe by the Algerian authorities and we are urgently continuing our work to establish the status of the British nationals caught up in this incident."

A British consular team is on the ground at In Amenas, providing aid to those Britons who escaped, while the ambassador Martyn Roper en route.

Hundreds of workers escaped on Thursday when the army launched their operation, but some hostages were reportedly killed in the assault at the facility, which is jointly run by BP, the Norwegian energy firm Statoil and the Algerian state oil company.

Despite the casualties among the hostages, an Algerian government source quoted by APS strongly defended the military operation, saying it prevented a "true disaster" which would have caused "immeasurable" human and material damage.

One Briton is known to have died earlier in the crisis.

APS reported around 100 of the 132 foreign workers at the site had been freed along with 573 locally employed staff.

Two BP employees suffered nijuries although not life-threatening. Mr Dudley said 25 of the 56 BP workers in Algeria at the time of the attack have now left in a "staged process" of withdrawing all non-essential staff from the country.