Mohammad, Yousaf, 51, his wife Pervaze, 49, and their 22-year-old daughter Tania from Nelson, Lancashire, were in the country to attend a family wedding when they were shot dead by five armed men.
It is understood they were targeted by members of their own extended family when a bitter feud which had been rumbling spilled over into violence.
Police sources in Pakistan said they thought the attackers were led by Khusheed Arif, who was enraged after learning his sister Nabeela was being divorced by Mr Yousuf’s son Kamar.
The couple, who were cousins, married around 10-years ago and had two daughters, nine-month old Harris and three-year-old Arien. They separated recently and had attended court earlier this month to finalise their divorce.
A close friend of the family, Councillor Mohammed Sakib, condemned the murder as a cold blooded "honour killing".
He said: “I know the family well, the parents are nice people. This incident wasn't just murder, it was an honour issue.”
However, Pakistani legal experts insisted it did not constitute an honour killing as divorce was not prohibited within the traditional system which is regarded as law in several rural provinces.
The honour system, which is based on the eye for an eye principle, is often used to settle punishments for adultery, elopments and rapes.
Eileen Ansar, who is married to Mr Yousaf's cousin Mohammed, said the split between the couple's son and his wife had caused tensions within the family.
She said: “There have been tensions since the son and girl separated but the father treated her like his own daughter.
“He looked after the girl, kept her at his home. She is his sister's daughter but he treated her like his own daughter, he loved her and respected her as his own daughter.”
She added: “It is an absolute tragedy. You could not meet nicer people, they never did harm to anyone. It has destroyed the family.”
Two of the gunmen were arrested shortly after the attack but three others were still being hunted last night.
The Yousaf family had travelled to Pakistan to attend the wedding of one of their other sons, 24-year-old Asad, and had stayed on in the country to enjoy a holiday.
After visiting relatives they had stopped at a graveyard to pray when they were ambushed by the armed gang.
The gunmen, who were all believed to be brothers, shot Mr and Mrs Yousaf with Kalashnikov rifles, before dragging Tania from the family’s car and killing her.
Yesterday blood was smeared across one of the low, marble tombstones at the scene.
In Nelson friends and neighbours of the family expressed their shock and outrage at the killings.
Family friend Mohammed Iqbal, who sits on Pendle Borough Council and Lancashire County Council, said: "Everybody is shocked. It was a family dispute that obviously went horribly wrong."
He said two of Mr Yousaf's sons had returned early to Lancashire from Pakistan but had flown back to the country after being told of the deaths.
He said: "They went for a wedding and a holiday and they are now having to bury members of their family."
Tania, who was also married with two young boys, had worked as a clerical assistant at business solutions firm Liberata in Nelson.
She had been granted a month’s leave and was due to return to work next week.
Her manager Wendy Smith, said: "Tania was a hard-working and conscientious member of the team who was always happy and one of the nicest people we have ever met. She had a lovely sense of humour and was always a team player.
"We are extremely shocked by this and our deepest sympathies go out to the family. She will be very sadly missed."
A Facebook tribute page which was set up by friends had hundreds of messages of condolence last night.
Pendle MP Andrew Stephenson addressed the hundreds of men who came to pay their respects at Brunswick Street Mosque, Nelson for Friday prayers.
The Conservative MP assured those gathered that British and Pakistani authorities were liaising together to ensure the protection of the remaining family members.
