The announcement of extension came after Norwegian special peace negotiator Erik Solheim rushed to London to meet LTTE's political advisor Anton Balasingham on 22 January. The LTTE say that the ceasefire extension affirms Tiger desire for peace and offers more time for the Norwegian peace effort. The LTTE called on the international community to bring pressure on the Sri Lankan government to accept the ceasefire.
Suspicions within and outside the government over the motive of the Tiger offer remain. The LTTE are accused of unilaterally breaking the ceasefires in 1990 and 1995. Sri Lankan Prime Minister Ratnasiri Wickremanayake declared that the government will continue to fight until the Tigers come for negotiations and a ceasefire thereafter would depend on their conduct.
In mid-January, President Chandrika Kumaratunge told the ruling People's Alliance that the government will not yield to international pressure. If the LTTE wants to pursue a political solution, they could submit proposals, which may be a basis for peace talks, she remarked. The President continued to insist that peace talks should be in accordance with an agreed timetable, which details every aspect of the procedure. Reports say that the LTTE declined to sign a Memorandum of Understanding outlining the process for negotiations prepared by Mr Solheim, and want the government to endorse it first.
Erik Solheim met the opposition leader Ranil Wickremasinghe in Colombo on 11 January. The United National Party (UNP) leader did not view the government's rejection of the ceasefire as a drawback but observed that peace cannot be won by war and that every effort must be made to draw the LTTE to negotiations. A government statement following a meeting between the Mr Solheim and the President says that the discussions were encouraging but confirms government position against a ceasefire before peace talks.
In her message on the 53rd anniversary of independence on 4 February, President Chandrika said that the cost of living is rising because of large monies spent on the war. The Sri Lankan rupee has again been devalued and the government is facing demonstrations over fuel prices, which have risen by over 20%. The UNP’s protest march Janasakthi (People power), against soaring prices, from Kandy to Colombo, began on Independence Day.
Analysts say the deteriorating economic conditions may force the government to agree for a ceasefire. The government may continue the war until the Army re-captures Elephant Pass in the Jaffna peninsula. The LTTE seized the massive military base in April last year and advanced up to Jaffna town. Since then the Army has launched a counter offensive and has re-taken parts of the territory east of Jaffna town. Some observers believe that the government is using the ceasefire issue to pressure Britain to ban the LTTE under the Terrorism Act 2000.
The UK Act empowers the Home Secretary to proscribe an organization which he believes commits or participates, prepares for, promotes or encourages terrorism in any country. Any person who belongs to, supports or assists such organization would commit an offence. Fundraising for a proscribed organization is also an offence. The law requires banks and businesses to report suspicions on funding arrangements or laundering of terrorist money.
Sri Lankan Foreign minister Lakshman Kadirgamar, who has been waging a five-year international campaign against the LTTE, warned last month that Britain's failure to ban the LTTE under the Act and close the Tiger headquarters in London would severely damage relations between the two countries. Meanwhile, 11 Tamil political parties in Sri Lanka have communicated to the British government, firmly opposing a ban on the LTTE.
The Tigers are said to raise large amounts of funds from the expatriate Tamil community, particularly in Western countries. A UK proscription would encourage the other European nations to follow suit. The US and India have already banned the LTTE. There is widespread concern that a ban may affect the Norwegian peace initiative and UK's involvement in the process. It will also strengthen the hand of extremists in Sri Lanka who are opposed to peace. Mr Balasingham warns that a ban will force the LTTE to withdraw from the Norwegian process. Others cite the threat of a British ban as a reason for LTTE declaring a ceasefire. A UK ban, they argue, would keep the Tigers on course to the negotiating table.
As the debate raged, a bomb damaged vehicles at the office of British agency Oxfam in Colombo on 31 January. Similar bomb attacks were carried out last year on Norway's embassy and the office of the Norwegian agency Redd Barna. The National Front Against Tigers (NFAT) has claimed responsibility. In January 2000, the NFAT claimed responsibility for the killing of Tamil Congress leader Kumar Ponnambalam.