The Foreign Office is investigating claims a video which appears to show UK hostage Kenneth Bigley being killed has been released by militants in Iraq.
Kenneth Bigley was taken hostage on 16 September
Reuters news agency said a witness had seen the video showing Mr Bigley making a statement before being beheaded.
Mr Bigley, 62, of Liverpool, was taken hostage on 16 September by the Tawhid and Jihad group which beheaded two Americans captured at the same time.
The Foreign Office says it is "urgently investigating" reports of his death.
Earlier on Friday afternoon, Abu Dhabi TV said it was told by "informed" sources in Iraq that Mr Bigley had been killed.
Reuters news agency also quoted Falluja insurgent sources as saying the Briton had been killed on Thursday in Latifiya, a Sunni Muslim town south-west of Baghdad.
US forces have stepped up operations in Falluja in recent weeks, in a bid to regain control there ahead of planned national elections in Iraq in January.
Dubai-based news channel Al-Arabiya TV also said its sources confirmed the execution of Mr Bigley.
TV station Abu Dhabi said it would not show the video.
In a statement, the station said: "The station took an editorial decision not to show such footage. Abu Dhabi TV refuses to serve as a mouthpiece for such
groups or their actions."
A Foreign Office spokesman said it was "trying urgently to corroborate reports that Kenneth Bigley has been killed but has not yet done so".
The Foreign Office was "in close touch with the family at this difficult time", he added.
Iraqi Interior Ministry officials in Baghdad said they had no information on the report, Reuters said.
Mr Bigley's brother Paul had been due to take part in a Stop the War Coalition rally at Liverpool University on Friday evening. He would have contributed via a video link from his Amsterdam home.
Spokeswoman Carmel Byrne said a message from him would be read out instead.
She said it would say: "Please, please stop this war and prevent other lives being lost. It is illegal and has to stop. Mr Blair has blood on his hands."
Mr Bigley was last seen alive in a video broadcast last week, pleading for Prime Minister Tony Blair to help him.
Brothers Stan (front) and Philip Bigley gathered with family members in Liverpool
Mr Bigley's Thai-born wife Sombat, has made several emotional appeals for mercy.
The engineer was captured just weeks before his official retirement when he would have joined her in Thailand.
Mr Bigley's Irish-born mother Lil, 86, has been treated in hospital several times.
A nurse was seen entering her Liverpool home this afternoon as members of his family awaited further news.
Three police officers were outside the family home, with a mass of press photographers lined up directly across the street from the family's Victorian mid-terrace home.
If Mr Bigley's death is confirmed, church bells at nearby St Mary's in Walton will be rung and a book of condolences will be opened for local people to sign.