At least 10 British nationals are unaccounted for in the "ongoing" Algerian hostage crisis, according to Sky Sources.
It follows an Algerian attempt to rescue gas workers taken hostage by al Qaeda-linked militants which ended in a number of deaths.
Prime Minister David Cameron warned of "further bad news" as he put off a high-profile speech on Europe to stay in London and oversee developments.
Mr Cameron is chairing a meeting of the Cobra emergency committee to discuss the hostage situation at a gas plant in eastern Algeria. He will make a statement in the House of Commons at 11am.
Algerian authorities announced there had been "some deaths and injuries" in the operation to free foreign workers from Islamist militants.
A satellite image shows the scale of the sprawling gas complex But it was unclear how many casualties or which nationalities there were, with conflicting reports from sources on the ground.
Foreign Secretary William Hague cut short a visit to Australia to return to the UK and there was also expected to be a ministerial statement to the House of Commons.
He said: "The responsibility for the tragic events of the last two days squarely rests with terrorists who chose to attack innocent workers, murdering some and holding others hostage."
The UK government has not had confirmation from the Algerian government as to whether the crisis is over, and Foreign Office officials believe hostage takers could still be on the site.
Sky's Sophy Ridge said: "There has been perhaps an assumption … that this is a now just a search operation but certainly that's not the basis that the Foreign Office in the UK is working on."
The In Amenas facility is close to the border with Libya The rescue attempt was launched early on Thursday without consultation with the UK. Mr Cameron was only informed it was under way when he spoke to the Algerian prime minister.
Algerian communications minister Mohamed Said Belaid said the military operation succeeded in "neutralising a large number of terrorists and freeing a large number of hostages".
He added: "But unfortunately, we are sorry to say, there were some deaths and injuries.
"We do not yet have a definitive figure. As soon as we have it, we will make it public."
One British citizen has already been confirmed dead earlier in the hostage situation.
Among those confirmed freed include Irishman Stephen McFaul and three Japanese workers.
Speaking after cancelling his long-awaited Europe speech, Mr Cameron said: "We should be prepared for the possibility of further bad news, very difficult news, in this extremely difficult situation."
The militant group believed to have carried out the raid on the In Amenas gas plant - Katibat Moulathamine or The Masked Ones - said it was retaliating for French military intervention against al Qaeda-backed rebels in neighbouring Mali.
The attack began on Wednesday morning when heavily-armed militants launched a dawn raid.
They claimed to have seized dozens of foreign workers, including Britons, Americans, Norwegians and Japanese.
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