The families of five Britons taken hostage in Iraq almost two years ago have been warned by the government not to expect an imminent release despite hopes among Iraqi officials that new negotiations could lead to freedom for at least one of the men within weeks.

“We are supporting all efforts to end this horrific situation and return the British men to their families,” said a source close to Nouri al-Maliki, the Iraqi prime minister. Maliki is due to travel to London next month and Gordon Brown is expected to raise their plight.

Negotiations have been held intermittently through Iraqi politicians since May 29, 2007, when a radical Shi’ite group seized Peter Moore, an IT consultant from Lincolnshire, and his four security guards from a Ministry of Finance building.

Officials in Baghdad said talks had recently gained momentum with the kidnappers, who call themselves the League of the Righteous and are believed to have close links with Iran. They broke ranks with Moqtada al-Sadr, the radical cleric who heads the Mahdi army, after he called for a ceasefire with coalition forces.

Iraqi officials said the captors had demanded the release of comrades including Qais al-Khazaali, al-Sadr’s former spokesman, who is believed to have masterminded an attack in Karbala that killed five American soldiers; his brother Laith; and Ali Mousawi al-Daqdouq, a senior official in Hezbollah, the Lebanese militia.

Laith could be freed as early as this week, according to the officials. They hoped this would prompt the release of one or more British hostages.

British officials played down reports last week that there was a “done deal”. They have been negotiating at arm’s length through Shi’ite contacts, and Iraqi sources said one of the most important factors in the apparent progress was a statement by David Miliband, the foreign secretary, that Britain was willing to talk to the political wing of Hezbollah, which is now part of the Lebanese government.

“Hezbollah is now very active in a positive way behind the scenes in this hostage scenario,” a senior Iraqi official said yesterday.

A video of Moore was handed to the British embassy in Baghdad last week by an Iraqi MP. Moore appeared well but it was not clear whether all four fellow hostages – who, at their families’ request, have not been named – were alive. Their captors claimed last year that one had committed suicide.

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