The Islamic State asked for a ransom of up to $33 million for the release of New Zealand nurse Louisa Akavi, it has been reported.

Akavi, 62, was abducted by the terrorist group in October 2013 while travelling in a Red Cross convoy in north-western Syria.

It is not known where she is. But the International Committee of the Red Cross (ICRC) and the New Zealand Government have reasons to believe she is alive because there were credible sightings of her in the Islamic State's last strongholds in December.

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The New York Times reported that two people told the Red Cross they had been treated by Akavi at a clinic in Sousa, a village in the east of Syria which international forces overran last month.

New Zealand nurse Louisa Akavi kidnapped, held by Isis for six years.

Those sightings have given hope to the Government, which feared the worst five years ago when she was taken hostage and the Islamic State began executing foreign hostages in gruesome, widely publicised videos.

However, there have been no further sightings of Akavi as thousands of captives have been liberated in recent months. If still alive, Akavi would be the longest-held hostage in the Red Cross' 156-year history.

She was among seven people abducted five years ago while returning to Damascus from Idlib, where the Red Cross had provided supplies to a medical facility. Four of the hostages were released the next day but Akavi and two Syrian workers were held.

The New York Times said there were negotiations between the Red Cross and the terrorist group over the next few months via text, phone calls and emails.

The Islamic State initially demanded a ransom of €1m (NZ$1.67m) and for the release of detained fighters. The ransom later rose to €20m euros (NZ$33m) before falling again to €5m (NZ$8.35m) - on par with other Western hostages.

The New Zealand Government has a policy of not paying for hostages.

The head of Red Cross' crisis management team for Avaki's case, John Dyer, said the organisation's policy was not to pay any ransoms.

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The family, and Akavi, were aware of the Red Cross policy.

Dyer said the family had not made any requests to the Red Cross for any ransom to be paid.

NZ Red Cross secretary-general Niamh Lawless and head of the crisis management team for the case, John Dyer, during their media conference in Wellington today. Photo / Mark Mitchell
NZ Red Cross secretary-general Niamh Lawless and head of the crisis management team for the case, John Dyer, during their media conference in Wellington today. Photo / Mark Mitchell

The Red Cross checked that the captors were genuine by asking for Akavi's insurance policy, which was kept on a card which she carried, the New York Times reported. When the Islamic State fighters answered correctly, they were asked personal questions about Akavi to confirm she was their prisoner.

The Herald has been told that she was known to be held with - until at least September 2014 - American aid worker Kayla Mueller, who Islamic State reported killed by an air strike in 2015.

While most hostages were released in mid-2014, Akavi and others from countries who also had no-ransom policies remained in captivity. Female prisoners were initially spared from executions but the Islamic State threatened on one occasion to kill Akavi and Mueller in retaliation for a failed rescue attempt, the New York Times reported.

The Islamic State stopped corresponding with the Red Cross in 2014 but the aid organisation received reports from escapees in 2017 that they had been treated by Akavi.

The New Zealand Government last received "proof of life" information about her in October 2015. Nothing was heard of the Kiwi nurse from then until her presence was raised by Islamic State as a bargaining chip to escape Baghouz in February.

"Throughout the past five years, the New Zealand Government and the ICRC have always worked on the basis that Louisa was alive and that hope still remains," Foreign Affairs Minister Winston Peters said today.

"We continue to work together to locate and recover her."