The terrorists are said to have made a device using radioactive uranium stolen from Iraq’s Mosul University after seizing control of the city last June.
And this week they were boasting of the damage it would cause if blown up in London, although sources insist security measures would make it almost impossible to transport here.
Among those bragging about the bomb’s development is Hamayun Tariq, of Dudley, West Midlands, who is now training fellow Brits in Syria.
Tariq, 37, who has had his passport cancelled by the Home Office, told fellow militants via a social media account that “jihadist” dirty bombs are now a reality.
“O by the way Islamic State does have a Dirty bomb. We found some radioactive material from Mosul University,” he posted online.
“We’ll find out what dirty bombs are and what they do. We’ll also discuss what might happen if one actually went off in a public area.
“This sort of a bomb would be terribly destructive if went off In LONDON because it would be more of a disruptive than a destructive weapon”.
A fellow militant replied: “This will likely escalate western involvement, but Allah knows best.”
It is claimed the device includes uranium from a stash of 40 kilograms looted by IS.
Iraq’s UN Ambassador Mohamed Ali Alhakim informed UN Secretary-General Ban Ki-moon of the theft in a letter on July 8.
He wrote: “Terrorist groups have seized control of nuclear material at the sites that came out of the control of the state.”
If the bomb does exist, militants are far more likely to use it in Syria or Iraq, rather than trying to smuggle it into a Western country.