Carson Bilsland, 46, from Bridge of Cally, Perthshire, is believed to have been among a large group of hostages who died as the gas plant siege came to a bloody conclusion at the weekend. Six Britons and one Colombian-born British resident are now assumed to have been killed.
The other Scot to die in the siege was Kenneth Whiteside, of Glenrothes, Fife.
Mr Bilsland's identity was established as Algerian Prime Minister Abdelmalek Sellal said 37 foreigners of eight nationalities and one Algerian worker were killed during the four-day stand-off.
Some 29 Islamist militants were killed in the armed raid, he said. Three terrorists had been captured.
Islamist militant Mokhtar Belmokhtar claimed responsibility on behalf of al Qaeda for the attack and his group the Mulathameen Brigade (the Masked Ones) threatened to carry out more attacks directed at states involved in battling Islamists in Mali.
Prime Minister David Cameron said British intelligence and counter-terrorist experts would help detect and dismantle the network that launched the attack.
He added that the UK was "not seeking a combat role" in Mali, although it would provide troops to a French-led European Union mission to train the Malian military to combat Islamist militants who have taken over the north of the country.
Mr Cameron stressed the international community's action must be "tough, intelligent and patient" and combine a strong security response with political moves to tackle instability and resolve grievances as well as a long-term drive to counter the "poisonous" ideology of violent extremism.
It emerged Mr Bilsland, who had been working in Algeria as a "non-destructive testing technician" for just under two years, was an experienced free-diver and a former ski instructor at Glenshee. His immediate family were too upset to comment, but John Macpherson, who had worked with Mr Bilsland at Glenshee, described him as a "very vibrant character" whose loss was a great shock.
A friend of his father, Ian Bilsland, said: "He had worked out in Africa before and I think some of the time the conditions can be a bit hairy, but no-one could have foreseen something like this happening."
Mr Bilsland competed with the British speed ski team and a
spokesman for the group said: "It is a very sad day for British speed skiing.
"I'm sure he wouldn't have given an inch. Carson was one of life's indomitable characters. He will be sorely missed but very fondly remembered."
Bob Whiteside, the brother of Kenneth Whiteside, confirmed his brother had been executed by his captors.
Mr Whiteside was originally from Glenrothes in Fife but had lived in South Africa for 30 years. His brother, from Crieff in Perth and Kinross, said the first the family learned of his death was through the social networking site Facebook and he held no grudges over the way the hostage crisis was handled.
A further eight Scots escaped from the In Amenas facility and are now back in Britain.
Alan Wright, 37, of Portsoy, Aberdeenshire, one of the Scottish survivors, told how he managed to escape across the desert after Algerian colleagues cut a hole in a wire fence at the plant. "We just thought, we have to go now. We walked very quickly into the desert, not even looking back," he said.
Justice Secretary Kenny MacAskill said he believes no-one could have predicted the "horrendous attack" at the gas plant as there always been "difficulties" in Algeria.
A Foreign Office spokesman said its priority throughout the crisis was always "the welfare of British nationals caught up in this terrible incident" and it had always tried to provide as much support and information to relatives as possible.