MANILA (Reuters) - Islamic State-inspired militants who battled troops in a southern Philippine city for 154 days sought a way out two months into the fierce conflict, but the government ignored their proposal, a separatist negotiator and a minister said. The takeover of Marawi was the biggest security crisis in decades in the Philippines, fuelling concern that Islamic State and Indonesian and Malaysian extremists might have greater sway among its minority Muslims than previously thought. Abdullah Maute, one of those leading the Dawla Islamiya rebel alliance in the city, had engaged Muslim leaders to urge President Rodrigo Duterte to let the militants escape in return for the release of scores of captives, one cleric said. Agakhan Sharief, a Marawi Muslim cleric well known to the militant Maute clan, said that around July 27, Abdullah Maute asked for help in arranging for the Moro Islamic Liberation Front (MILF), a separatist group at peace with the government, to receive hostages and escort militants out of the city.  He agreed to negotiate to leave Marawi on the condition the MILF is involved,  Sharief told Reuters.  I told him when he goes out of Marawi, there s no guarantee the military will not kill him. He said,  No problem .  He was very serious at the time.  The violence in Marawi killed more than 1,100 people, mostly rebels, and the city center has been destroyed by artillery and government air strikes. The military believes Abdullah was killed in an air strike in early August, but the body was not found. His brother and co-leader, Omarkhayam, was killed on Oct. 16, along with Isnilon Hapilon, Islamic State s   emir  in Southeast Asia. The government allowed the MILF to operate a  peace corridor  in Marawi that helped rescue hundreds of civilians. The MILF s top peace negotiator, Mohagher Iqbal, confirmed Maute made the proposal, but the government had ignored it.   There was no formal negotiation and our role was only to facilitate. It s up to two sides to agree,  he told Reuters.  We had some reservations about the deal. Although some of the Maute members were former MILF, we doubted their intentions and sincerity. We do not know if they would honor the deal.  Scores of hostages escaped or were rescued in the last few months of the fighting, but it is unclear how many may have been killed. Authorities have yet to retrieve all bodies from a battle zone that is still littered with unexploded munitions and homemade bombs. The army says a few militant holdouts are still hiding in what is now ground zero. Defence Secretary Delfin Lorenzana told Reuters Duterte was aware of Maute s request to flee Marawi in exchange for hostages, but the offer was too little, too late.   Too many soldiers had been killed,  he said.  If they had proposed that in the first week, when there had not been so many casualties, then it would have been OK.  It was too late, he (Duterte) was no longer inclined to entertain any deals with them.  