While Solheim did not go into detail on how the money funnelled to the Tigers was spent, he did say that the rebels acquired a radio transmitter with the government's knowledge.

Oslo, Norway: A peacebroker accused of helping fund Sri Lanka's separatist war acknowledged on Monday that Tamil rebels had been induced to engage in the peace process but said payments were made with the government's blessing.

Erik Solheim, a Norwegian diplomat who for nearly a decade headed international efforts to broker a peace deal, was accused by President Mahinda Rajapakse at the weekend of "giving money" to the Tamil Tigers who waged a 37-year insurgency for a separate homeland before being crushed in 2009.

The comments came in an address by the nationalist president in front of supporters in the countdown to an election expected in January.

But Solheim, who initially accused Rajapakse of "telling lies", said on Monday that while the Tigers had indeed been given "economic resources", all payments had been conducted with the Colombo government's full knowledge.

"Norway made economic resources available to the LTTE (Tamil Tigers) peace secretariat in order to assist them in engaging more fully with the ongoing peace process," he said in a statement.

"This, moreover, was done with the full knowledge of the government of Sri Lanka under different leaders, including during the period when Mahinda Rajapakse was prime minister.

"As with all our peace efforts in Sri Lanka, transparency with respect to the government in Colombo was total."

While Solheim did not go into detail on how the money funnelled to the Tigers was spent, he did say that the rebels acquired a radio transmitter with the government's knowledge.

Solheim said Rajapakse -- who comes from the island's majority Sinhalese community -- had expressed his gratitude "both to Norway and myself" after inviting them to continue peace efforts soon after he won the presidential election in 2005.

"Thereafter, President Rajapakse made a number of political requests that he asked me to convey on his behalf to LTTE leader Velupillai Prabhakaran.

"All these messages were duly communicated on to the LTTE leadership, and the killings ceased for a period," Solheim said.

The envoy did not give the nature of the political requests of the president, but added that details would be revealed in a book next year.

While Solheim did manage to broker a truce between the government and rebels in April 2006, it later unravelled.

The war was finally ended by a brutal onslaught on the rebels' last remaining stronghold, during which Prabhakaran was killed.

AFP