A video released on Monday in the Philippines appeared to show the beheading of a German hostage by Abu Sayyaf, a terrorist group linked to Isil.

Jurgen Kantner, 70, had been held captive by the group for three months in the jungles of southern Sulu province after being kidnapped from his yacht on 5 November.

His wife Sabine Merz, 59, was fatally shot during the attack when she fought back.

The video, picked up by the US-based monitoring group, SITE, shows an elderly man slumped on the grass with a man holding a knife to his neck.

“Now they’ll kill me,” he said, before his execution on Sunday, when the deadline for a $780,000 ransom expired.

The murder comes amid growing fears that the Islamic State of Iraq and the Levant (Isil) and its affiliates are expanding in south-east Asia even as it suffers military defeats in the Middle East.

The southern Philippines is now emerging as the epicentre of regional jihad after Isil appointed veteran militant Isnilon Hapilon as its Southeast Asian emir in a video released last year.

A manhunt is currently underway for Hapilon after he was reportedly gravely injured in a military airstrike at the end of January on his headquarters on the southern island of Mindanao.