Russian Deputy Interior Minister Vladimir Vassilyev said that Barayev was among about 50 rebels killed during the pre-dawn operation.

Barayev - a relatively unknown rebel leader - was a nephew of one of the most notorious figures of the Chechen war, Arbi Barayev.

After seizing the hostages on Wednesday night, Movsar Barayev said the rebels were ready and willing to die and would kill the hostages if Russia did not withdraw from Chechnya within a week.

On the website of one the radical Chechen groups, he said the hostage-takers "had come to Moscow to die, not to survive".

Barayev was the only member of the hostage-takers to appear on Russian television without a mask.

Ruthless uncle

He was described by some Russian-backed Chechen officials as a middle-ranking rebel leader.

Barayev's uncle was blamed for the deaths of four foreign workers in 1998

According to a source within Russia's security services, the FSB, he took over command in July last year of a group of about 300 rebels previously led by his uncle, who had been killed by Russian forces a month before.

Arbi Barayev was the most ruthless hostage-taker of Russians and Westerners in the breakaway republic, and was reported to have boasted that he had personally killed 170 people.

It is alleged that he may have had links with Osama Bin Laden.

He was the main responsible for the beheading of four captive telecommunication workers - three Britons and one New Zealander - in 1998.

A fellow captive later told the BBC that he had been bidding for a $10m ransom from the men's employers, British Telecom and Surrey-based Granger Telecom, but he stood to get $20m more from "Arab friends" if he killed them.

According to Russian sources, these friends were none other than al-Qaeda.

The Barayev empire

The Barayev empire at its height included a lucrative trade in Chechen oil and control of a main road through Chechnya.

Millions of dollars were collected in ransoms paid for hostages.

Although Arbi Barayev lived openly in his home village of Alkhan-Kala, Russian forces took no action against him for years.

When they finally went on the attack the battle lasted for days, and resulted in massive destruction.

Russian forces launched an operation in August 2001 to eliminate Movsar Barayev, and claimed to have killed him in Chechnya's second city of Argun.

It was one of many such claims that later proved unfounded.