Paul Urey was detained by Russian troops while on a humanitarian aid mission in east Ukraine in April.
UK Foreign Secretary Liz Truss said she was "shocked" by reports of the death of British aid worker Paul Urey, captured in April in Ukraine, and warned that Russia should "take full responsibility".
On Friday, a spokesperson for Russian-backed separatists in Donetsk said Urey died in custody on 15 July.
"I am shocked by reports of the death of British aid worker Paul Urey, held on behalf of Russia in Ukraine," said Truss in a statement.
"Russia must take full responsibility," she added, while her ministry announced they had summoned Russia's ambassador to London Andrei Kelin.
Paul Urey, who was born in 1977, was detained by Russian forces with another man Dylan Healey at a checkpoint in April, according to an NGO helping Healey's family.
The two men were apparently held while driving to help evacuate a woman and two children from their home in the southern region of Zaporizhzhia.
Originally from the north of England, Paul Urey is described as a family man who spent eight years in Afghanistan as a civilian contractor.
In early July, a pro-Moscow separatist news agency in eastern Ukraine reported that two Britons - likely referring to Urey and Healey - were facing charges of being mercenaries, for which other British nationals had already been sentenced to death.
"Despite the seriousness of (his) crimes, Paul Urey was receiving adequate medical help. Despite this, in view of his diagnosis and stress, he died on 10 July," separatist spokesperson Daria Morozova wrote on the Telegram social media channel, insisting that Urey was a mercenary and not a humanitarian worker.
Previously, Paul Urey's mother said she was "extremely concerned" about her son who had type 1 diabetes and relied on insulin to stay healthy.
"We know that my son Paul and his friend who was a humanitarian aid volunteer in Ukraine have been captured by the Russians," Linda Urey said. "We want everyone's support to bring my son home."