Top terrorist recruiter Mohammad Baryalei is behind an Islamic State plot to murder Australians on video, police say, sparking the nation's biggest ever counter-terrorism raids and prompting warnings of a high alert for a further 18 months.

NSW and federal police as well as ASIO officers raided homes across Sydney and Brisbane on Thursday morning, arresting 15 men, some of them as young as 17 or 18.

They swooped amid fears for the public's safety after Baryalei allegedly spoke by phone with Omarjan Azari on Tuesday to discuss a plan to kidnap and murder – presumably by beheading – a random person on camera, the footage of which would then be posted online by the Islamic State's sophisticated and powerful propaganda wing.

It is understood that without any specified time or place for any attack, police were concerned they might not be able to stop the plot. They therefore chose to move quickly and make the arrests.

NSW Premier Mike Baird delivered a fierce warning to anyone "intent on bringing overseas conflicts to Australia".

"We will hunt you down," Mr Baird said. " If you have any intent to threaten the security of this community ... those that think they may be operating in a dark corner, we are shining the light upon you.

"You may well be listened to as we speak."

The plot revolved around a plan to kidnap a bystander off the streets of Sydney and kill them on video. While beheading was not specifically mentioned in the alleged phone call on Tuesday – one of several believed to have taken place between Baryalei and Azari – it is assumed that this would have been the method of the killing.

Azari, 22, was charged on Thursday with conspiracy to prepare for a terrorist attack. He is the only man arrested who has been charged so far.

He is believed to have moved to Sydney from Afghanistan with his family a decade ago. He attended nearby Parramatta High and was believed to be an apprentice mechanic, who came to the attention of intelligence officers six months ago.

Australian Federal Police assistant commissioner Neil Gaughan told Fairfax Media that the terrorism alert level would have to stay on "high" despite the arrests – perhaps for a further 18 months.

"There is no doubt in my view the terror alert needs to stay high for the foreseeable future. We have seen an unprecedented increase in activity over the last 12 months," he said.

"And it's based on a lot of factors – ISIL, the declaration of the caliphate, an intent by people to do things in support of that, people continuing to recruit … We are in totally uncharted waters. I do not see any respite in the next 18 months."

The AFP has  also stepped up efforts to arrest Baryalei and other Australian militants, posting an officer to the Turkish capital of Ankara in coming weeks to liaise with local authorities in the hope of arresting Australian suspects, including Baryalei as they move between Syria and Turkey, the main pipeline for terrorists.

"If we get information or intelligence that one of these guys happens to set foot into Turkey, we'd work with the Turkish authorities to bring them to some form of justice," he said.

Baryalei, 33, is suspected of having recruited as many as half of the Australians who have gone to fight in Syria and Iraq. Sources say he is a significant figure in the Islamic State group, wielding considerable authority.

It is understood that Baryalei knew at least one of the men arrested on Thursday from school.

Among those who had their properties raided are believed to include relatives of of Milad Bin Ahmad-Shah Al-Ahmadzai.

The 24-year-old, who has been under surveillance by ASIO for four years, is currently in prison having been convicted of two charges of threatening serious harm to a Commonwealth official earlier this year.

He was also convicted of stealing $100,000 during an ATM ram raid.

Some of the suspects were "on the peripheries" of a previous plot that led to the December arrest of Hamdi al Qudsi, accused of being a ringleader for recruitment of fighters bound for Syria and Iraq.

The source said the group met on sporting fields and in homes and did not belong to any mosque.

They appeared to be aware they were being surveilled and at times had allegedly threatened authorities who were monitoring them.

"Their operational security was pretty good. They didn't use communications like your or I would use," the source said. "They would use things like public phone boxes. They'd avoid talking in cars, all that sort of stuff."

Mr Gaughan said the AFP would talk to international counterparts about whether similar cases were emerging elsewhere.

"We'll obviously compare notes with our international partners over the next few days to see whether they're involved in any similar types of investigations.

Xenia Cotter, AFP senior investigator on the case, is heading to Washington on Friday for a counter-terrorism meeting where current plots would be one of the "key discussion points", Mr Gaughan said.

Follow us on Twitter