Foreign Minister Rohitha Bogollagama told Parliament the arrest of Sri Lankan-born U.S. business tycoon Raja Rajaratnam as a “significant development in the area of the LTTE’s financing network”.

He said investigations on the activities and support of Mr. Rajaratnam to the terrorist organisation were continuing, particularly in relation to the funding allegedly provided by him to the LTTE front organisation Tamil Rehabilitation Organisation (TRO).

Meanwhile, Deputy Finance Minister Sarath Amunugama told Parliament that Prime Minister Manmohan Singh had directly told the International Monetary Fund that New Delhi would give Sri Lanka $2.6 billion if the IMF did not approve the standby facility requested by the country.

He was quoted in the local media as saying that this was the type of friendship Sri Lanka had nurtured especially with its regional neighbours and that the country would never forget the assistance received from countries like India and Pakistan.

“I want to place this on record. Indian Finance Minister Pranab Mukherjee telephoned the Indian representatives of the IMF and asked them to canvass for the approval of this loan to Sri Lanka,” he said.

In another development, Janath Vimukthi Peramuna (JVP) parliamentarian K.D. Lalkantha told a news conference here that his party would be willing to extend support to Chief of Defence Staff (CDS) Sarath Fonseka if the General decided to put himself forward as a common candidate for the next presidential election.

A similar offer had also been made to General Fonseka by the new Sinhala Urumaya party.

According to the JVP MP, the former Army chief would have a clear advantage over the ruling UPFA’s candidate.

However, Mano Ganeshan has said that his Democratic People’s Front would not be party to the proposed United National Alliance if General Fonseka was going to be its presidential candidate.

In a letter to opposition leader Ranil Wickremesinghe, Mr. Ganeshan said many parties in the UNA wanted the former Army chief to be their candidate. However, Tamil speaking people of the country did not have anything in common with General Fonseka for him to be their common candidate, he said.