Nazir Mohammed broke down under interrogation by the Indian security services and said the hostages were killed because they were slowing the escape of their captors through the icy Himalayas.
The Britons Keith Mangan, 34, an electrician from Middlesbrough, and Paul Wells, 23, a photographer from Blackburn, as well as an American Donald Hutchings, 41, and a German Dirk Hasert, 26, are among six foreigners missing after being kidnapped by a separatist rebel group last July. They had been trekking through mountains 65 miles south of Srinagar in Jammu- Kashmir.
One hostage has since escaped, and another, Hans Christian Ostro, a Norwegian, was beheaded.
After Mr Nazir's confession, police yesterday centred their search for the bodies near the village of Kokaranag. Ironically, Kokaranag, a scenic tourist spot, was only a few miles away from the place where the westerners were abducted while trekking last July.
Al-Faran, the group which was holding the hostages, has claimed for months that it was no longer holding them. It has accused the Indian army of holding them, and Al-Faran's repeated denials that it no longer had the hostages raised fears that they were dead.
But the evidence of the guerrilla chief seems to remove the last doubts. A senior Kashmir intelligence officer said: "Nazir broke down and was crying. He said the hostages' bodies were buried to give the militants time to flee. Otherwise, the army would have intensified operations in the area and caught them." Nazir was unclear of the day the hostages were murdered, saying it was either 13 December or 23 December.
Indian authorities notified the British High Commission, along with the American and German embassies, of Nazir's confession almost immediately.
The Foreign Office said that it had launched an investigation. "It is very worrying. We are obviously taking this very seriously and are investigating the reports fully," a spokesman said. But he added: "Until we hear otherwise, we have to assume that they are still alive."
This was echoed by the US Embassy. "We continue to operate on the assumption that these guys are alive and we are making our best efforts to get them released," said a spokesman, Stephen Seche.
Julie Mangan, 33, said she had not given up hope her husband was still alive. "I do not think anything has happened to Keith and I have to believe that. I have been down this road so many times before but until I hear one way or another I remain hopeful that Keith and the other hostages are still alive," she said.
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