Russia's school siege ended in a chaotic bloodbath yesterday with more than 200 hostages and some of their captors killed when special forces stormed the building in an unplanned onslaught.

Several of the terrorists escaped, and last night they were believed to still be holding some of the hostages.

The bloody outcome was a disaster for President Vladimir Putin who had pledged to do everything possible to save the lives of the hostages - almost 850 of estimated 1,200 captives children.

His advisor on Chechnya, Aslanbek Aslakhanov, said the death toll might be "much more" than the early figures.

And military chiefs face the axe for allowing their troops to launch the raid.

"No military action was planned. We were planning further talks," said the regional head of Russia's Federal Security Service (FSB), Valery Andreyev.

Putin was heavily criticised two years ago when Russian troops botched the rescue of hostages in a Moscow theatre siege and more than 120 people died.

Troops surrounding School Number One in the small Caucasus town of Beslan, 1,000 miles from Moscow, were expecting another long day of waiting and negotiations when suddenly all planning was thrown out of the window shortly after 10.20am British time.

Reports suggested the militants had agreed to let Russian authorities retrieve the bodies of ten to 20 hostages who had been killed.

A local MP, Azamat Kadykov, had told hostages' relatives that 20 adult men had been executed.

Emergency personnel went to get the bodies, and the gunmen began setting off bombs and opening fire on people around the school,

A group of near naked children and their mothers then began fleeing from the school.

Some gunmen- or women - left the school and began chasing the terrified escapees. Russian special forces began firing back, and in the words of one local "All hell broke lose."

An explosion - thought to be the gunmen detonating charges - blew the roof off the school gym where hundreds of hostages where being held.

As attack helicopters hovered overhead, Russian commandos stormed the school and within an hour claimed they had secured the building. That turned out to be an optimistic statement as fighting continued into the evening and some children were said to be still being held hostage in the school

At least three gunmen, including possible their leader, were said to be blockaded in the school basement seven hours after the onslaught began.

Shortly after 5pm British time, a powerful blast rang out on the school grounds, and an official said a member of an elite security unit died saving two girls.

Officials said more than 150 people were killed and in excess of 500 others - almost half of them children - were wounded in the onslaught.

About 100 bodies lay on the floor of the school gymnasium where the hostages were held for three days - some apparently killed when the roof collapsed.

Russian forces killed 20 of the hostage-takers - some described as Arabs - but 13 others escaped.

Troops backed by tanks were pursuing the militants, some of whom were said to be holed up in a house in the area as others attempted to blend in with the former hostages and crowd of townspeople in Beslan.

Regional FSB chief Valery Andreyev said Russian forces were conducting a "fierce fight" to free remaining hostages. He said at least 60 dead victims had been identified.

Police said the hostage-takers had split into three groups during the storming. Some of them remained in the school, others apparently sought to escape southward in the town and others tried to mix in with the hostages.

Regional president Alex-ander Dzasokhov said the hostage-takers had demanded that Russian troops leave Chechnya.

In a chaotic scene around the school, hundreds of people ran through the streets, columns of smoke soared overhead and the cries of children - many of them naked - and the wounded filled the air.

Commandos, locals and journalists scurried around the burning brick school. Some soldiers climbed inside through a lower floor window, all the glass missing.

The militants had broken most of the windows earlier in what might have been an effort to prevent authorities from using a knockout gas against them.

At a hospital about a mile from the school, anguished families crowded around arriving ambulances in a desperate bid to see who was inside.

About two dozen children lay on bloodied stretchers under a grove of pine and spruce trees. Parents and relatives hugged and kissed them, feeding them water.

The militants had freed about 26 women and children on Thursday, and Russian officials and others had been in on-and-off negotiations with the terrorists.