Britain stands accused of applying double standards to its counter-terrorism policy because a banned Tamil militant group is being allowed to raise money among expatriates in London.

President Rajapaksa of Sri Lanka said that supporters of the Liberation Tigers of Tamil Eelam (LTTE) were able to raise millions of pounds each year from the Tamil community in Britain, some of whom were coerced into donating the money.

“You can't have two different attitudes towards terrorism,” he told The Times this week during a visit to London for a Commonwealth meeting, where he raised the issue with Gordon Brown. “I don't agree that there are good terrorists and bad terrorists. There is only one kind of terrorist.”

There are about 150,000 Tamils living in Britain, mostly in North London. The Sri Lankans estimate that £70million is sent home every year.

“These are not voluntary contributions, the money is taken by force, usually a percentage of their income,” said Mr Rajapaksa, who attracted Tamil protesters during his stay. “The money is sent back to buy weapons. London is not the only place; money is also sent from Europe, Canada and other places.”

The Sri Lankan leader, who has earned a reputation as a hardliner, came to power nearly three years ago when a fragile ceasefire brokered by Norway was still in place. After a series of clashes — including suicide attacks against the head of the Army and Defence Minister, who is the President's brother — the simmering 25-year old conflict erupted into fresh violence.

Over the past two years government troops have been successful in retaking some rebel-held areas to the east and north of the island, but at a heavy cost. Several Sri Lankan sailors and Tamil guerrillas were killed yesterday when the “Sea Tigers”, the rebel naval wing, attacked a navy base on the island of Mannar. So far this year an estimated 4,000 Tamil Tigers and 357 government troops have been killed.

Many of the casualties are civilians and government troops have been accused of widespread human rights abuses and of allowing a pro-government paramilitary force to commit atrocities.

Mr Rajapaksa said that he was taking steps to protect human rights. He blamed his Government's poor international reputation on “clever propaganda” by the Tigers.

“We have failed in the propaganda fight,” he said.

Mr Rajapaksa insisted yesterday that in spite of the cost in lives and damage inflicted to Sri Lanka's tourist trade he would not resume peace talks with the Tamil Tigers until the organisation agreed to disarm.

“When they are weak they call on the international community to arrange a ceasefire. During this period they train and rearm and then fight back. This time if they want to talk, they should disarm first,” he said.

Even if the Tigers were to meet his preconditions it seems unlikely that he would ever be able to conclude a peace deal with Velupillai Prabhakaran, the charismatic rebel commander.

“This man and the three or four henchmen around him are blood-thirsty killers,” said Mr Rajapaksa. “They have no feelings. It is very difficult to deal with them.”

In another development, Sri Lanka has refused to let a team of Norwegian peace mediators visit rebel territory without a clear “road map” for a democratic solution, fearing a visit coud be used as propaganda. The military said yesterday that it was closing in on the Tamil Tigers' leader.

“The security forces are attacking Mullaittivu, Prabhakaran's hideout, from several directions. The army's aim is to capture Prabhakaran, who is holed up in a bunker, alive,” Lieutenant-General Sarath Fonseka said.

Times Recommends

• Violent video games won’t corrupt
• Pope Benedict XVI: Alma Mater
• Chávez should know what’s good for him