ISIS is said to be planning a new wave of attacks against Western targets in an attempt to boost morale following crushing defeats in Syria and Iraq.

An intelligence official has warned the terror group's leader Abu Bakr al-Baghdadi is said to be alive and plotting his next evil move.

After US-backed offensives in Mosul and Raqqa have seen Islamic State fighters all but wiped out, the expert warned a new generation of terror groups could emerge from the ashes.

In the meantime, al-Baghdadi is thought to be pulling together ideas for 'sophisticated attacks' on countries such as Britain as an EU chief warned ISIS was moving funds out of the Middle East and pumping cash into European operations.

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Abu Bakr al-Baghdadi - pictured here in 2014, the last time he was seen in public - is said to be alive and plotting his next evil move

Police officers walk in a line in Borough Market, London, where eight people were killed by ISIS militants in June

An Iraqi policeman stands guard outside a mosque during prayers marking the beginning of Eid al-Adha in Mosul, northern Iraq, as ISIS' stranglehold loosened on the city

With morale of ISIS militants at an all-time low, the attacks would give the evil group a boost, the head of Kurdish intelligence Lahur Talabany told the Telegraph.

He said: 'We are going to see a lot more attacks on the West that are designed to boost the morale of the fighters who have suffered heavy losses.

'They are trying to do attacks that will get them publicity.

'The more sophisticated attacks are being organised by the leadership around the al-Baghdadi camp.'

Mr Talabany believes the ISIS leader is hiding out in the desert somewhere near the border between Syria and Iraq.

At the group's height, there were said to be 500 British jihadis fighting with ISIS.

The majority have been killed, but there are fears some surviving terrorists could be picked to carry out the attacks in their home countries by al-Baghdadi.

France is still on high alert for terror after a string of Islamic-related incidents since the atrocities in Paris back in November 2015 as is Britain following the Westminster, Manchester and London Bridge attacks.

Wounded people are evacuated outside the scene of a hostage situation at the Bataclan theatre in Paris, France, November 14, 2015. 130 people were killed and hundreds injured in the terror attacks which targeted the Bataclan concert hall, the Stade de France national sports stadium, and several restaurants and bars in the French capital

People pay their respects on the end of London Bridge with flowers and post-it notes after the terror attack

Smoke rises after a tank shell hits a house in village of Al-Qasar during fighting between Iraqi soldiers and Islamic State fighters South-East of Mosul (file photo)

Civilians return to their village after it was liberated from Islamic State militants, south of Mosul, Iraq, last year

It comes as the EU's security chief Julian King warned of a 'real risk' of increased funding for attacks in Europe as ISIS loses ground in Iraq and Syria.

Islamic State has lost an estimated 90 percent of its territory in Iraq and 85 percent in Syria as a result of military campaigns, some of them backed by Western forces.

At one time, the group held around half of Syria, much of it uninhabited desert, but today it controls just 15 percent, according to Syria specialist Mr King.

British diplomat Julian King told the civil liberties committee in the European Parliament: 'As we squeeze Daesh on the ground in Iraq and Syria, they're moving quite large amounts of funding out.

'We need to continue our efforts to try and stop that but there will be some funding that gets out. And we have to be conscious of that.

'That there could be a risk of new sources of funding for terrorism and we have to prepare for that and see what we need to do to strengthen measures to combat it.'

Last month, a UN report said that IS was continuing to send remittances abroad - often small sums, making them difficult to detect - as part of a bid to step up its international efforts 'as demonstrated by the higher pace of attacks in Europe.'

The report said funding sources were still based on oil profits and the imposition of taxes on local populations in the areas under its control.

However, it said the financial situation of the IS 'core continues to deteriorate,' mainly due to military pressure on the group.

In the last two or three years, EU member states have been hit by an increasing number of attacks claimed by IS which have taken place in Spain, Britain, France, Belgium, and Germany.