A dispute over money within a Nigerian jihadist faction affiliated to the Islamic State group has spiralled into clashes that has killed "scores" of fighters, sources said.

The infighting -- which erupted into gun battles on July 26 -- has exposed divisions inside the Islamic State West Africa Province (ISWAP) group, three sources with deep knowledge of the faction's internal workings told AFP.

The disagreement centred on sharing income mainly generated by taxing cattle herders and fishermen in areas the jihadists control around Lake Chad, said the sources, who asked not to be identified for safety reasons.

The fighting broke out in the village of Blantougou in Niger before spilling over the border into Nigeria.

It pitted those loyal to tax chief Umar Leni against two other factions, the sources said.

"There was heavy fighting between the three factions which left scores from all sides killed," one of the sources said.

"They could not agree on a sharing formula after six days of disagreement and resorted to fighting," he said.

Leni escaped the fighting unscathed and was believed to have fled to Mali with the group's stash, according to the sources.

The infighting is just the latest to hit the factious jihadist insurgency that has torn apart northeastern Nigeria and crossed into neighbouring countries over the past decade.

ISWAP broke away from Boko Haram in 2016 in part due to its rejection of indiscriminate attacks on civilians.

Last year the group witnessed a reported takeover by more hardline fighters who sidelined its leader and executed his deputy.

The IS-affiliate has since July 2018 ratcheted up a campaign of attacks against military targets.

Military sources told AFP that 25 soldiers from an international force and at least 40 jihadists were killed in fighting Monday near the town of Baga on Lake Chad.

A military source in the region told AFP they were "closely monitoring" the reported clashes within the jihadist group.

ISWAP has sought to fill the void left by the collapse of government authority in the areas it controls by offering basic medical service and providing security, sources and analysts say. (AFP)

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