Britain's Prime Minister David Cameron postponed a much-anticipated speech on Britain's future role in the European Union because of the hostage crisis at an Algerian gas plant where Britons are believed to be among those held.
Cameron warned people to expect "bad news" after Algerian forces launched an operation to free the hostages.
"The Algerian armed forces have now attacked this compound," Cameron told the BBC.
"It is a very dangerous, a very uncertain, a very fluid situation and I think we have to prepare ourselves for the possibility of bad news ahead."
His speech, which he had been due to make in Amsterdam, had been eagerly awaited by lawmakers and Britons as well as by officials and politicians across Europe.
"Due to events in Algeria, Prime Minister David Cameron's speech in the Netherlands tomorrow has been postponed," his office said in a statement.
Algerian sources said twenty-five foreign hostages escaped and six were killed in a battle with militants demanding a halt to a French military operation against fellow al Qaeda-linked Islamist fighters in neighbouring Mali.
Britain and Norway, whose oil firms BP and Statoil run the plant jointly with Algeria's state oil company, said they had been informed by the Algerian authorities that a military operation was under way.
However, a spokesman for Cameron had earlier said the Prime Minister had phoned his Algerian counterpart to express his concern at what he called a "very grave and serious" situation, and said Britain would have "preferred" to have been informed of the operation in advance.
"We face a very bad situation at this BP gas compound in Algeria," Cameron said.