Their disappearance - the first time foreigners have been kidnapped in the seven-year insurgency - occurred on Sunday night. Two of those taken are thought to be Britons, one an officer. The other three are Nepalese nationals. All are believed to be serving Gurkha soldiers.
"We understand a group claiming to be Maoists approached and asked them to come and discuss recruitment issues with their commanders," said Peter Bullock, the assistant military attache at the British embassy in the capital, Kathmandu.
The rebels have been fighting since 1996 to remove the Nepalese royal family and establish a communist republic in the impoverished mountain kingdom. The insurrection has claimed at least 7,500 lives; a seven-month long ceasefire collapsed at the end of August.
The Maoists are opposed to the recruitment of Gurkhas by the British and Indian armies, branding them as mercenaries. The first units of Nepalese fighters were recruited by the British East India Company as long ago as 1815.
The army's Brigade of Gurkhas is currently 3,400 strong; some units are based in Britain, some in Brunei. To maintain numbers, the army recruits 230 men from Nepal every year. Gurkhas have participated in recent military operations in Bosnia, Kosovo, Afghanistan and Sierra Leone.
Prem Narayan Sharma, the district administrator of Baglung, 190 miles north-west of the capital, said the five men were taken on Sunday from Lekhani village, near a stronghold of Maoist insurgents.
"A police and army rescue team will be sent from the district headquarters," Mr Sharma said. He was reportedly confident there was no danger to the lives of those taken and hoped they would be released in a day or so.
Britain, which hosted a conference last year to mobilise international support for Nepal, spends about £22m a year on development projects in the kingdom. Around £6m of that is spent reinforcing Nepal's military and police capacity by providing training and equipment for the Royal Nepalese army. The training, according to the Foreign Office, includes "developing human rights awareness" and teaching bomb disposal techniques.
As well as being a backer of the Nepalese government in the conflict against the Maoists, the Ministry of Defence maintains a small permanent presence in the country to organise recruitment and maintain contact with Gurkha families.
Fighting between the rebels and government troops has escalated since the rebels pulled out of peace talks in August. Nepal's defence ministry claimed yesterday that at least 25 rebels had been killed in clashes with government troops over the past two days.
Amnesty International last week issued a report blaming the Nepalese security forces for the disappearance of at least 250 people since the rebellion began. The human rights group also alleged that soldiers had been responsible for the massacre of 18 suspects in the Ramechhap district.