Sri Lanka peace talks to go ahead

Sri Lanka's government will go ahead with direct talks with Tamil Tiger rebels despite the political crisis following the sacking of three ministers.

Negotiator G L Peiris said they had asked peace broker Norway to push ahead with arrangements for a preliminary round of talks with the Liberation Tigers of Tamil Eelam (LTTE) either later this month or early next month.

'There are no changes in our plans and we are going ahead to arrange that preliminary meeting,' Mr Peiris told reporters.

He admitted that with the sacking of defence minister Tilak Marapana Tuesday by President Chandrika Kumaratunga, the government had no control over the implementation of the truce with the rebels.

The US, the European Union and the United Nations had expressed concern that the political tension could harm the peace process.

Yesterday President Chandrika Kumaratunga sacked three senior government ministers, suspended parliament and ordered troops to guard key installations in the capital, Colombo.

Reports suggest she took the action because she disagreed with government concessions to the Tamil Tigers.

Her Prime Minister and political rival, Ranil Wickremesinghe, who is on a visit to Washington, said the move could plunge the country into chaos and anarchy.

However a spokesman for the Sri Lankan President said the Tamil ceasefire was not under threat.

Sri Lankan stocks dived 13% in their biggest ever fall following the sackings.

Optimism over the economy, which the central bank had forecast would grow as much as 6% this year and 6.5% in 2004, had driven the market up 70% this year.

But a five percent fall yesterday, and today's drop of almost 13% cut its gain for the year to 42.47%.