``Such terrible lies can come only from them (the Tigers)'' said military spokesman Brig. Daya Ratnayake.

The pro-rebel TamilNet Web site said rebel leader Velupillai Prabhakaran raised the issue of alleged government plans to spend aid on arms when he met with Norway's Foreign Minister Jan Petersen on Saturday.

The separatist Tamil Tigers fought Sri Lanka's army from 1983 until a Norway-brokered 2002 cease-fire. The truce had seemed increasingly fragile just before the tsunami, but immediately after there were signs that the tragedy might inspire cooperation.

Now, the bitterness appears to be creeping back.

Prabhakaran ``has brought to the notice of the Norwegian delegation that the international aid coming to the country ... is being misused by the government,'' TamilNet quoted chief rebel negotiator Anton Balasingham as saying.

Balasingham said the government has earmarked US$150 million (euro116 million) for arms, the Web site reported, saying he called this ``an attempt to tilt the balance of military power.''

Ratnayake said the government uses only its annual budget for defense spending.

Meanwhile, Norway's foreign minister - mediating between the government and rebels to ensure tsunami relief is fairly distributed in Tiger-held areas - met with Sri Lanka's prime minister Sunday.

Prime Minister Mahinda Rajapakse and Petersen ``had very good discussions, and the prime minister thanked Norway for assisting Sri Lanka at this critical time,'' said Rajapakse's secretary, Lalith Weeratunga.

Weeratunga did give details about aid discussions.

With Norway's encouragement, the rebels and government are discussing the creation of a joint body to ensure equal aid distribution.

After meeting with Petersen on Saturday, Balasingham said the body would try to dispel rebel concerns that aid to Sri Lanka's north and east - home to most of the country's 3.2 million minority ethnic Tamils - was being held up by ``bureaucracy, corruption or political intrigues.''

The government has said it is going out of its way to make sure rebel-held zones get their fair share.

The Dec. 26 tsunami killed at least 31,000 in Sri Lankans, with some estimates ranging beyond 38,000. About 1 million were displaced. Published: Sun Jan 23 08:36:34 EST 2005

The government has grown increasingly cagey about how it will spend money being sent to the Indian Ocean island by countries, companies and private citizens moved by wrenching images of the Dec. 26 catastrophe in which more than 38,000 Sri Lankans died.

As frustration grows along the stricken southern and eastern coasts, watchdogs are concerned that aid could be sunk into ambitious new projects, squandered through political posturing or simply squirreled away by corrupt officials. More... Published: Sun Jan 23 08:21:55 EST 2005

With Norway's encouragement, the Tigers and the government are discussing creation of a joint body to oversee distribution of aid in rebel areas, a Tamil Tiger leader said. Speaking after a meeting with Norwegian diplomats, chief Tamil Tiger peace negotiator Anton Balasingham said the body would be aimed at dispelling rebel concerns that aid was getting entangled with "bureaucracy, corruption or political intrigues."

He didn't give further details. Norway helped mediate a cease-fire three years ago in Sri Lanka's two-decade civil war. More... Published: Sun Jan 23 08:16:20 EST 2005