Australia's most wanted terrorist Neil Prakash is reportedly alive and under arrest despite reports he was killed six months ago in northern Iraq.

The New York Times reports the former Melbourne man, who is linked to several failed Australian terror plots to kill innocent citizens, was only injured, not killed in Mosul on April 29, as previously announced.

The ABC reports Prakash was arrested by Turkish authorities several weeks ago after being contacted by Australian officials who believed they had intelligence he was planning to enter the country. AAP has contacted Turkish authorities for comment.

The "death" of Australia's most wanted terrorist was reported by US authorities to the Federal Government, who hailed it in parliament in May as a major breakthrough in the fight against domestic terrorism and the recruitment of vulnerable youths.


Prime Minister Malcolm Turnbull told parliament in May Prakash had been considered the most senior Australian operative in IS, where he actively encouraged acts of terrorism and ruthlessly recruited vulnerable children as well as other Australians with "hateful propaganda".

Terrorism expert Levi West, from Charles Sturt University, told ABC's 7.30pm last night that although reports of Prakash's death were wrong, the injuries he received during the strike still disrupted his ability to influence others.

Yesterday, Counter Terrorism Minister Michael Keenan did not say whether the government had any fresh information from the US about Prakash.

"These places are war zones, with many ungoverned spaces. And there have been people who have been reported dead and are later found to be alive," Mr Keenan said in a statement to AAP.

The government does not comment on matters relating to intelligence operations, he said.

Prakash was linked to a failed Melbourne plot to behead a police officer on Anzac Day last year and Numan Haider, an 18-year-old who was killed after stabbing two police officers in Melbourne in 2014.

In it's report, The New York Times lists Prakash as one of a series of high-value IS recruiters and motivators deliberately targeted by the FBI by drone attacks.

He was part of a cell of English-speaking IS propagandists the FBI dubbed 'The Legion', the newspaper reported.

The group was singled out by a combined US/British counter-terrorism operation aimed at blunting IS's startling influence through social media platforms such as Facebook and Twitter.

The operation has reportedly resulted in the arrests of more than 100 social media followers of the Legion's key members.

All were deemed 'inspired' by their propaganda campaigns during the past two years.

Prakash travelled to Syria in 2013 where he adopted the name Abu Khaled al-Cambodi.

He was reported to have been killed in an air raid against a bank being used by IS to store cash last year.

However, The New York Times quoted a senior US military official who now says he survived, but was wounded.

"In the last few weeks, however, a Middle Eastern government arrested Mr Prakash, another senior American military official said," the report reads.

The leader of the operation, British computer specialist Junaid Hussain, 21, was reportedly killed by a drone-launched Hellfire guided missile as he walked the streets of Raqqa - IS's self declared capital in Syria - in August last year.

His punk-rock musician wife, Sally Jones, is believed to have survived.

Two other Legion' members, both also British nationals, have also been killed - Raphael Hostey and Reyaad Khan.

"We are still dealing with the repercussions of that development and that recruitment of that network to this day," FBI official Mr McCabe told The New York Times.

-additional reporting from AAP and News Corp Australia Network