* Cameron warns Britons to expect "bad news"
* Not told in advance of Algerian swoop on hostage-takers
* PM calls off long-awaited speech on Europe
By Michael Holden
LONDON, Jan 17 Prime Minister David Cameron postponed on Thursday 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.
A sombre-looking Cameron warned people to expect "bad news" after Algerian forces launched an operation to free the hostages from Islamist militants, saying one Briton had already been killed when the site was stormed on Wednesday.
"The Algerian armed forces have now attacked this compound," he told BBC TV. "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."
Foreign Office Minister Alistair Burt echoed Cameron's words and painted an even bleaker picture.
"Although details have yet to become final, I'm afraid we should be under no illusion that there will be some bad and distressing news to follow from this terrorist attack," he told reporters.
The BBC, citing unnamed government sources, said officials were preparing for "multiple British casualties".
The gravity of the situation prompted Cameron to call off what had been dubbed a career-defining speech on Europe which he had been due to make on Friday in Amsterdam. The address had been long awaited by Britons and lawmakers at home, 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. The new date and the venue for the speech would be announced in due course, it added.
A spokesman for Dutch Prime Minister Mark Rutte, who had been due to meet Cameron in The Hague before his cancelled speech, said he "fully understood" the decision, according to local news agency ANP.
Algerian sources said 25 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, Cameron seemed irked that he had not been informed that the military action would take place.
He had earlier phoned his Algerian counterpart to express concern at what he called a "very grave and serious" situation, and to say Britain would have "preferred" to have been informed of the operation in advance, Cameron's spokesman told reporters.
Asked if he expected the death toll of Britons to rise, Cameron told the BBC: "We know there were a number of British citizens taken hostage, we know of one who very sadly died and we know that this is a very difficult situation."