Australia's spy agency has been enlisted to help crack down on radicalisation in jails after revelations Aboriginal prisoners are converting to Islam and risk becoming extremists.

Sheikhs and imams are being brought into prisons to deliver de-radicalisation messages during Friday prayers, but two prominent Sydney sheikhs have told a high-level forum that chaplaincy services are grossly under-funded and prison converts are misinterpreting the religion.

A small but high-risk group of radicals are causing concern to Corrective Services NSW and it is believed recruitment to Islam is active, particularly among Aboriginal inmates.

Sheikh Omar Habbouche, who has worked with inmates and prison chaplains, says faith is a powerful tool in the reformation of prisoners but the lack of Muslim chaplaincy services in NSW means prison converts are misinterpreting Islam.

There are just two Muslim chaplains spread across 10 of the state's prisons.