The BBC's Duncan Kennedy: The political momentum to act is very strong

The severed heads of Britons Darren Hickey, 26, Peter Kennedy, 46, and 42-year-old Rudi Petschi, and New Zealander Stan Shaw, 58, were found in western Chechnya, close to the border with Ingushetia, on Monday.

The Foreign Office said it had heard the reports but had not seen a copy of the tape.

'Videotape found by commandos'

Chechnya's Vice-President, Vakha Arsanov, is reported to have showed the videotape to a foreign journalist.

Mr Arsanov said Chechen commandos, who are hunting for the kidnap gang, found the tape on Wednesday.

On the tape the four hostages identify themselves and then, speaking in Russian, go on to say: "We have been recruited by the English intelligence service.

"We installed a satellite aerial so that all phone conversations on Chechen territory were heard by German, English and Israeli special services and the CIA."

All four victims worked for Granger Telecom

The four men had been working for Granger Telecom, a British telephone company which had won a £190m contract to install telephone lines across Chechnya.

A Foreign Office spokesman said he could not confirm or deny the four were spying but he said the allegations were "utterly implausible".

He pointed out the two humanitarian workers released earlier this year, Camilla Carr and Jon Jones, were also accused of spying and suggested the kidnappers had a "blinkered" view of the world.

A spokesman for Granger Telecom immediately dismissed any suggestion the men had been working as spies.

He said: "Clearly we will be in touch with the appropriate authorities in seeking confirmation as to the authenticity of the reported video.

"However, there is no truth whatsoever to the suggestion that the former telecommunication engineers had any association with any UK intelligence organisations."

The hostages, who were abducted in the capital, Grozny on 3 October, were killed by kidnappers on Monday after a bungled rescue attempt.

The British ambassador to Moscow, Sir Andrew Wood, said: "We don't comment on these things in general. But any reasonable analysis would show that we have no wish to spy on Chechen territory."

Debroah Hickey reveals her anger over her brother's death

Mr Hickey's sister, Deborah, told BBC Radio 4's Today programme she understood the rescue attempt had been conducted by freelancers, rather than Chechen authorities.

She said: "My brother is dead because these idiots have done this."

Miss Hickey said she did not hold Granger Telecom responsible for the deaths and said her brother was a "grown man" who was responsible for his own actions.

Joan Shivas: "There hasn't been a day I haven't thought about him"

But she did criticise an unnamed news agency who, she said, had given out details of where the hostages were being held shortly before the abortive rescue bid.

Miss Hickey said the rescue attempt ruined delicate negotiations which were going on between Granger and the kidnappers.

She said her father and brother, Kieran, were grief-stricken by news of Mr Hickey's death and added: "My mum is absolutely devastated. Only a mother would know."

Mr Hickey's parents run a pub in the village of Thames Ditton, Surrey, where a community-based Website has set up an online book of support for the grieving couple.

Mr Shaw's sister, Joan Shivas, said of the Chechen government: "If they hadn't intervened things could have been different."