Islamic State: Australian fighter Neil Prakash alive, arrested in Middle East, counter-terrorism officials confirm.

Senior Australian counter-terrorism officials have confirmed that Australia’s most wanted Islamic State terrorist Neil Prakash has been arrested in the Middle East.

The Federal Government announced in May that Prakash was killed in a US air strike in Mosul, describing it as a significant blow to the group’s recruitment of Australians.

However, The New York Times has since reported Prakash was wounded but survived the attack, and was arrested by an unnamed Middle Eastern Government in the last few weeks.

The Melbourne extremist had been a key player in inspiring violent terrorism in Australia and was reportedly involved in foiled terror plots at Anzac Day commemorations in 2015 and 2016.

Prakash, who has gone by the name Abu Khaled al-Cambodi since joining the group, was described by Attorney-General George Brandis as “the principal Australian reaching back from the Middle East into Australia”.

The Attorney-General said Prakash had also called for lone-wolf attacks against the United States.

“He has appeared in ISIL propaganda videos and magazines and has actively recruited Australian men, women and children, and encouraged acts of terrorism,” Senator Brandis said in May.

Prakash also apparently had some influence on Numan Haider, the 18-year-old who was killed after stabbing two police officers in Melbourne in 2014.

The Prime Minister’s office has been contacted for comment.