The claim came as the employer of three of the men said he knew Chechnya was one of the most dangerous places on earth but considered working there was a risk worth taking.
Raymond Verth, the chief executive of Granger Telecom, said he knew the company was working against the advice of the Foreign Office (FO). "We undertook the contract with that knowledge and considered the risks were worth the effort," he said. "We understood and believed they [the men] were well catered for because we were contracted with the Chechen government and Chechen Telecom, who guaranteed our safety, which obviously has not occurred. We checked this situation, we believed it was safe."
However, The Independent has learned that five of the six bodyguards hired to protect the engineers failed to return fire when they were attacked by up to 20 armed kidnappers in the Chechen capital, Grozny, in the early hours of Saturday.
Ostein Larsen, a member of the Organisation for Security and Co-Operation in Europe - and one of just a handful of Westerners left in Grozny, said his group had been briefed on the kidnapping by Chechen officials. "They said that only one of the bodyguards returned fire when they were attacked," he said. "It's always dangerous for foreigners here if you don't take the right precautions."
Mr Larsen said it cost between $500 and $1,000 a month to hire a bodyguard in Grozny. "The trouble is that at the moment there is so much money floating about that it is easy to buy off bodyguards," he added.
Mr Verth said none of the men had been forced to work in Chechnya - on contract installing equipment for a new cellular phone system - and that each was made aware of the risks. Turnover of Granger's main operating company more than halved in the year to September 1997 and profits after tax were just under pounds 600,000. The five-year contract deal to design, provide and install the telecommunications system, including 300,000 telephone lines, was worth pounds 190m.
Mr Verth admitted yesterday: "The deal involved several million dollars - it was a large contract." Exactly where Chechen Telecom's money came from is unclear: the republic has been in economic ruins since the end of the war with Russia in 1996.
Yesterday, officials from Whitehall departments and representatives of M16 met to discuss developments. A FO spokesman said Sir Andrew Wood, the British ambassador in Moscow, received a brief fax from the OSCE. The FO has been in contact with the OSCE - an international monitoring organisation - as there are no British officials in Grozny. There has still been no contact with the kidnappers.
The British Embassy in Moscow said that it had so far received no ransom demand, and repeated the government's official line - that it will not pay for the return of hostages under any circumstances.
The Foreign Office is now certain to try to pressurise the Russian premier, Yevgeny Primakov, to raise the plight of the hostages during a planned meeting with the President of Chechnya, Aslan Maskhadov, on Saturday.
Whether they will succeed is uncertain. Yesterday the Russian government - which is now less overtly pro-Western than its predecessor - was distancing itself from the affair.
The Interior Minister, Sergei Stepashin, one of the authors of the disastrous Chechen war that created the current chaos in the republic, said there were no firm plans to raise the issue. He even appeared to blame the Britons for being in Chechnya without telling the Russian authorities - which still, vainly, insist the republic is part of the Russian Federation despite its humiliating defeat in a 21-month war.
But the Russians also have enough problems of their own - not least, the murder of Akmal Saidov, the government envoy seized in Chechnya last week. The discovery of his body, with an attached note accusing him of being a Russian spy, is likely to dominate any talks with the Chechens. Nor are matters helped by the increasing number of questions over whether the weak, consensus-seeking President Maskhadov can do anything.
One possible clue to who is holding the hostages came with reports that an injured kidnapper turned himself in to a hospital at Urus-Martan, a town 20 miles south of Grozny. This area is a stronghold of Arbi Barayev, a notorious bandit who is thought to have held the recently released British hostages Jon James and Camilla Carr. He is renowned for his ruthlessness.
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