Chechen Hostages: Only deadly shadows to do deals with in a land of chaos and Kalashnikovs

AT 11.39am local time the news broke at the British Embassy on Sofiiskaya Naberezhnaya in central Moscow.

The report, from the Reuters news agency, was as stark as it was lacking in detail; three bodies had been found in Chechnya, 40 miles from the capital, Grozny, and it was believed they were those of the British hostages.

Within moments, the report, and others that corrected the number of bodies to four, were passed directly to the ambassador, Sir Andrew Wood, who was working in his office.

Staff in the embassy, sited opposite the Kremlin, frantically tried to verify the reports. "We take all the reports we get seriously. Of course there had been many reports and rumours and the most important thing was to try and establish some facts," said an embassy source. "We started getting on to our contacts to find out what we could."

The tragedy that emerged yesterday started two months earlier in Lermontovo Street, a nondescript thoroughfare in central Grozny.

At about 4am on Sunday 4 October around 20 men armed with Kalashnikov assault rifles stormed a small building.

Grozny is one of the most dangerous places in the world, but the three Britons and one New Zealander staying there setting up telecommunication links should have been able to sleep safely that Sunday morning, protected as they were by six specially hired bodyguards.

But only one of the hired guns fought back, injuring one of the kidnappers. The sound of what was obviously a gun battle was ignored by the Chechen security forces whose headquarters were only 500 yards away.

The Britons, Darren Hickey, Rudolf Petschi and Peter Kennedy and the New Zealander, Stanley Shaw, apparently knew the risks of working in Chechnya.

Kidnapping for ransom, brutal massacres and beheadings used to be common all over medieval Europe. In the mountainous Caucasus region of Chechnya, where banditry is the rule rather than the exception, hostage taking and murder is still a way of life.

The Foreign Office considers it too dangerous to station any staff there. Since the beginning of this year alone, 176 people, many of them ethnic Russians, have been kidnapped in the region.

The Chechens, a Muslim nation whose forefathers abducted their Russian conquerors in the 19th century, have used kidnapping to punish those they perceived as invaders in the recent war for independence.

Often the Chechen kidnappers are common criminals. On Man in the Mask, a Russian television show that allows guests to hide their faces while speaking on sensitive subjects, a "middle-man" recently described an elaborate racket whereby the Russian mafia pays ransoms to Chechen kidnappers, splits the profits and keeps the business going.

Although much human misery was involved, the trade would continue, he said, because "that's market economics for you and this is a major market".

Raymond Verth, chief executive of Granger Telecom, the firm for which three of the men worked, said they had volunteered to go.

"We undertook the contract with that knowledge [about the lack of security] and considered the risks were worth the effort," he said.

At stake was a long-term deal worth a reported pounds 190m - a massive amount for the company, based in Weybridge, Surrey. Contrary to some reports that the four men were receiving massive "danger money" payments, they were not making a fortune.

Mr Hickey, 26, had been to Chechnya several times a year and was earning between pounds 20,000 and pounds 25,000. Mr Kennedy, a self-employed engineer hired by British Telecom, was on a 12-day contract.

Immediately after their kidnap there was silence; there were no demands from the kidnappers, and little emerged from the Foreign Office or from the Chechen authorities.

The four engineers must have kept up their spirits with the thought that only a few weeks earlier, the British aid workers, Camilla Carr and Jon James, were released after 14 months in captivity. Boris Berezovsky, the Russian media tycoon and politician responsible for relations with former Soviet republics, provided an aircraft to fly the two aid workers from Chechnya to Moscow.

"We would just tell the families to keep praying," said Alexandra Little, Ms Carr's sister-in-law.

Things were moving quickly behind the scenes. Within 24 hours the Foreign Office had called a meeting of officials from various Whitehall departments and other interested bodies, including the foreign intelligence service MI6 and the Foreign Office's specialist hostage unit.

The mood at the meeting, held the day after the kidnapping at the Foreign Office headquarters, in King Charles Street, London, had been workmanlike. It was the same later that day when officials met representatives from Granger and British Telecom and the men's relatives.

The Foreign Office was doing what it could, the families were told, but the British Government did not give in to blackmail. No ransom would be paid, should a demand be made.

To an extent, the Foreign Office was hampered by the status of Chechnya, a breakaway republic of Russia whose independence Britain does not recognise and where it has no staff.

In the first few days, the British ambassador in Moscow was relying on brief faxes from the international monitoring group, the Organisation for Security and Co-operation in Europe, one of the few Western organisations with staff still in Grozny.

But it emerged yesterday that some sort of negotiations were going on. With the agreement of the hostages' families, Granger Telecom took over day-to-day control of moves to try to secure the release of the men.

The Independent has learnt that to help in its goal the company employed Control Risks, a firm specialising in providing security for businesses working in some of the most dangerous places in the world. The Foreign Office was aware that Granger was working with Control Risks.

Initially, it seemed progress had been made. In a statement issued yesterday, Raymond Verth said: "We were making every effort to secure the safe release of the hostages. We had opened a dialogue with the kidnappers and received confirmation that the hostages were alive as recently as last week." The Chechen authorities also claimed they were doing what they could and were questioning the injured kidnapper who was being treated at a hospital at Urus Martan, 20 miles south of Grozny.

Exactly where the hostages were held is not known. Ms Carr and Mr James said they were moved dozens of times before they were finally released, a tactic designed to avoid detection by the security forces. But the security forces may have been closing in.

There were reports from Grozny on Monday suggesting the forces knew where the hostages were being held.

Indeed, there was speculation last night that the Chechens had launched a rescue attempt that went dramatically wrong.

"We have heard these reports but there is no collateral to back them up," said a British source in Moscow last night. "There is certainly no evidence that Britain was involved."

British advice to the Chechen authorities would have been to act with great caution and to steer away from an armed response. Officials were only too aware of the problems of trying to control the Chechen security forces, who were supposed to be helping.

Mr Kennedy's MP, the Liberal Democrat Paul Keetch, said yesterday that any such rescue attempt would have been "crazy".

If there was an attempt at a rescue, it certainly appears to have backfired. Granger Telecom remains convinced its negotiators were making pro-gress in securing the captives' release.

As the British Embassy in Moscow was still trying to co-ordinate a positive identification of the remains of the men last night, the greatest tragedy may yet be that the four men could soon have been coming home.

Countdown

to Killings

20 September

British aid workers Camilla Carr and Jon James fly home after being held in Chechnya for 14 months.

4 October

The four victims are taken. Kidnappers and at least one of the Britons' bodyguards is injured in a gun battle.

5 October

Roy Verth, chief executive of the men's company, says he and his staff were aware of the dangers in Chechnya and took precautions. But he ''considered the risks were worth the effort of the contract'' to install a cellular radio-telephone system.

14 October

Visiting Poland, Chechen President Aslan Maskhadov tells the press he believes the hostages are alive and that he hopes they will soon be released.

16 October

Ruslan Aushev, President of the neighbouring republic of Ingushetia, says the hostages' lives are not at risk, and promises to do all he can to free them.

20 October

Some14 Russian soldiers and a Turkish businessman held hostage in Chechnya are set free.

25 October

The Chechen government announces it is about to launch an offensive against kidnappers. On the day this offensive is due to be launched, a bomb explodes outside the anti-kidnapping unit's Grozny HQ. Its chief, Shaid Bargishev, 27, is fatally injured.

13 November

President Boris Yeltsin's envoy to Chechnya is released six months after being taken hostage there.

8 December

Chechen authorities say they have found the heads of the three Britons and one New Zealander.