Britain said on Monday that it is examining the video that purportedly shows Daesh (ISIL) execution of several British nationals.
"It [the video] serves as a reminder of the barbarity of Daesh and what the world faces with these terrorists. It is also clearly a propaganda tool and should be treated as such," said a spokeswoman for Prime Minister David Cameron.
She further said the video is a “propaganda tool” that shows the terrorist group is “under pressure”.
The spokeswoman added that the spooks are still examining footage of a masked militant speaking with an English accent, dubbed the “new Jihadi John”, slaughtering five people.
When asked whether the men shown had been spies, the spokeswoman declined to comment on intelligence matters but said the group's past propaganda had not all been true.
Cameron, himself, described the video as a "desperate” propaganda tool used by an organisation that is losing ground.
The video, which could not be independently verified, also shows the killing of five men accused of spying for the West.
The masked man threatens Cameron and vows that the ISIL will one day occupy Britain before shooting one of the alleged spies in the head.
"It's desperate stuff from an organisation that really does do the most utterly despicable and ghastly acts and people can see that again today," the prime minister told reporters.
"This is an organisation that's losing territory, it's losing ground ... Britain will never be cowed by this sort of terrorism, our values are so much stronger than theirs. It may take a very long time but they will be defeated."