AUSTRALIAN Islamic State sympathisers are helping to fund terrorism by disguising money in charity donations.

A Federal Government source confirmed to The Daily Telegraph supporters and family members of the now 110 Australians fighting for the IS terror network in Syria and Iraq have been caught out hiding terrorism funds in donations to charity or education programs.

The Australian Transaction Reports and Analysis Centre (AUSTRAC) black-flagged 536 financial transactions in 2014-15 which it deemed suspicious — a 300 per cent increase in one year — and reported 367 payments to the Australian Federal Police and ASIO for suspected terrorism financing.

In total they are investigating $53m in questionable transactions, some of which relates to funding terror.

media_camera Federal Justice Minister Michael Keenan says cutting off money to Islamic State is one of the best ways to combat the terrorist organisation.

From those payments, the centre determined that 170 Australians were suspected of directly supporting individuals or groups fighting in Syria and Iraq.

The figures were announced at a Joint Australia-Indonesia Counter-Terrorism Financing Summit in Sydney yesterday; a two-day conference attended by the French Consul General Nicolas Crozier.

In his opening address to the summit, Federal Justice Minister Michael Keenan said one of the most effective ways of combating terrorism was to cut off the supply of money flooding into the hands of terror groups funding their operations; hinting at a renewed crackdown on suspicious foreign money transfers.

“Disrupting terrorist financing is a vital part of our counter-terrorism efforts,’’ he said.

“Terrorist financing not only funds individual attacks and operations, it also helps support other parts of the terrorist enterprise, such as living expenses, travel, and compensation for wounded terrorists.

media_camera An Islamic State militant convoy in the Middle East.

“Cutting off the funds at the source can make a significant difference to national security in Australia, the region and internationally.’’

Mr Keenan confirmed ASIO was currently investigating 400 high-priority cases related to terrorism, double the amount the intelligence organisation had on its plate 12 months ago, adding that 41 Australians had now been killed fighting in Syria and Iraq.

“The current terrorism threat environment in Australia is unprecedented,’’ he said.