A Briton and an Italian taken hostage in northern Nigeria were apparently killed by their captors before or during a rescue attempt today,  Britain's prime minister said.

David Cameron said he had given the go-ahead for a rescue after "credible information" had been received about the location of Chris McManus and Franco Lamolinara, who were seized by gunmen in May 2011.

But both men were dead before their would-be rescuers could reach them.

Nigerian President Goodluck Jonathan said the pair were murdered by the resurgent Islamist group Boko Haram, which has been blamed for numerous violent attacks.

He said the killers had been arrested.

In a statement from his office, Jonathan condemned the killing of the two men "in Sokoto state Thursday by their Boko Haram captors before they could be rescued by a joint security raid on the kidnappers' hideout.

"The president, who particularly commended the cooperation and understanding of the British and Italian governments, assured that the perpetrators of the murderous act, who have all been arrested, would be made to face the full wrath of the law."

In London, Cameron said the Nigerian authorities, with British support, had launched the attempt to rescue the men after "a window of opportunity arose to secure their release".

"Preparations were made to mount an operation to attempt to rescue Chris and Franco. Together with the Nigerian government, today I authorised it to go ahead, with UK support," he added.

"It is with great regret that I have to say that both Chris and Franco have lost their lives.

"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."

The two hostages, he said, had been held by "terrorists" who had made "very clear threats to take their lives", and the captives had been in "imminent and growing danger".

AFP received a first video showing McManus and Lamolinara in August. In the footage, both men said their kidnappers were from Al-Qaeda.

In a second video received by a Mauritanian news agency and seen by AFP in December, masked gunmen threatened to execute McManus if their demands were not met.

Three masked men holding Kalashnikovs were shown with McManus. He gave his name and age before he made an appeal to the British government to negotiate with his captors to save his life.

McManus's family said in a statement they were "devastated" by the news.

"We knew Chris was in an extremely dangerous situation. However we knew that everything that could be done was being done," they said in a statement.

They also expressed their condolences to Lamolinara's family.

The two hostages worked for the Italian construction company Stabilini Visinoni. They had been helping to build a bank in the city.

The men were kidnapped by heavily armed men who stormed their apartment in the city of Birnin Kebbi, capital of Kebbi state in northwest Nigeria, near the Niger border.

Boko Haram was formed in 2004 and initially claimed to be fighting for the creation of an Islamic state in Nigeria's mainly Muslim north, but since then demands have varied.

Although its specific aims remain unclear, violence by the sect since mid-2009 has claimed more than 1,000 lives, including more than 300 this year alone, according to AFP and rights groups.

Nigeria's information minister Labaran Maku said that the government was appalled by Boko Haram's "pure terror" methods, but was open to eventual dialogue.