But he added he was ready to negotiate if five Taliban prisoners were freed.
The four hostages are shown sitting together in a line still wearing their security uniforms.
Sky News said Khalid allowed himself to be filmed to disprove the official claims and apparently to initiate negotiations with the authorities.
'The pictures showing Umer Khalid alive are likely to heap further embarrassment on the government,' the TV channel reported.
A powerful group of British MPs Sunday expressed concern that elements within Pakistan's army and ISI intelligence services do not support their government's war against terrorists.
The concern expressed by the British parliament's Foreign Affairs Committee in a report released Sunday was echoed by former foreign minister Mark Malloch-Brown.
'There is a difficulty, that within the ISI, there may remain individuals who have some sympathy with these groups,' Malloch-Brown told the committee.