Donations to Islamic State (Isis) in the Middle East have dramatically dried up in the wake of videos released by the group showing prisoners, Western hostages and minority groups being brutally beheaded, claimed the chief of US intelligence.

James Clapper said he believed there was "change" afoot in the region, with many former supporters now rejecting the group.

"It's not going to occur overnight. But I think these brutalities, publicised brutalities by ISIL [Isis], beheadings, immolation and the like, have really had a galvanising effect even in the Mideast," he said.

As a result, he said donations to the group were drying up. "There's been a big decline," he said, reports AFP.

Outlining the group's funding sources, he said private donations to IS now accounted for "less than 1%" of its funding, with most of its income coming through oil smuggling, bank robbery and extortion of those within territory it controls.

Countries including UAE, Saudi Arabia and Qatar have allowed funding to flow from wealthy nationals to extremist Sunni groups in Syria.

In February, Fuad Hussein, the chief of staff of Kurdish President Massoud Barzani said millions from the region was still flowing to IS.

"There is sympathy for Da'esh [the Arabic acronym for IS] in many Arab countries and this has translated into money – and that is a disaster," he told the Independent on Sunday.

Hussein said authorities tolerated the flow of funds as protection money to ensure the organisation did not strike in their territory.