A British woman has been killed in an alleged stabbing attack by a French man in front of up to 30 horrified onlookers at a backpackers hostel in Australia’s north-east.

The woman, 21, was found dead by Queensland police who were “confronted with a terrible scene” at the hostel in Home Hill – about 100km south of Townsville – on Tuesday night.

Queensland police said on Wednesday there were reports that the man, a French national aged 29, used the phrase “Allahu Akbar” – God is greatest in Arabic – during the attack that was witnessed by up to 30 people.

A British man, 30, was in a critical condition with stabbing wounds allegedly inflicted by the French man who has been taken into police custody.