Manila (AFP) - Islamic militants in the Philippines have beheaded a 70-year-old German hostage they were holding for ransom, Manila officials said Monday, as Berlin condemned the murder as "unscrupulous and inhumane".

The Abu Sayyaf group, blamed for the worst terror attacks in Philippine history, had demanded a ransom of 30 million pesos ($600,000) be paid by Sunday to spare Jurgen Kantner.

After the expiration of the deadline the jihadists, which were monitored by intelligence group SITE, posted a gruesome video showing Kantner being killed by a knife-wielding man.

Shortly after the clip appeared Philippines government envoy Jesus Dureza confirmed the death of Kantner, who was abducted from his yacht off the southern Philippines last year.

"We grieve as we strongly condemn the barbaric beheading of yet another kidnap victim," Dureza said in a statement.

"Up to the last moment, many sectors including the Armed Forces of the Philippines exhausted all efforts to save his life. We all tried our best. But to no avail," said Dureza.

Military officials in the south said they had not yet found the German's body.

His vessel, the Rockall, was found drifting on November 7 with the body of Kantner's female companion Sabine Merz with a gunshot wound.

German government spokesman Steffen Seibert later condemned "the abhorrent act".

"After weeks of worry, we have today the sad certainty that a German hostage has been barbarically murdered by terrorist kidnappers in the Philippines," he said, adding that "in our deepest grief, our thoughts are with the relatives and friends of our countryman".

"(The killing) once again shows, how unscrupulous and inhumane the actions of these terrorists are. We must stand together and fight against them."

German Foreign Minister Sigmar Gabriel earlier said if the video was confirmed as genuine it would be "one of the most horrible things imaginable".

- Perilous waters -

The couple had been kidnapped and held for 52 days in Somalia in 2008 before they were freed, reportedly after a huge ransom was paid, press reports said.

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Despite his ordeal in Somalia, Kantner told AFP in 2009 that he still intended to keep sailing into perilous waters.

"I know it's dangerous sailing off into Somali waters and I have no private security guarding me, but I pray to God that pirates won't get me again. It's a little bit like suicide," he said after being freed.

The Abu Sayyaf, whose leaders have pledged allegiance to the Islamic State group, have been kidnapping foreigners and Christians for decades and holding them for ransom in the jungles of the strife-torn southern Philippines.

They have frequently killed hostages if their demands are not met, and last year murdered two Canadians.

Apart from Kantner they are now holding at least 19 foreigners and seven Filipino hostages, military spokesman Brigadier General Restituto Padilla said.

The group, formed from seed money provided by a relative of Al-Qaeda mastermind Osama bin Laden in the 1990s, also carried out the bombing of a ferry in Manila Bay in 2004 that claimed 116 lives in the country's deadliest terror attack.

The military had been pressing an assault against the Abu Sayyaf, attacking their camps and bombing their hideouts just before Kantner was killed.

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