The Liberation Tigers of Tamil Eelam on Friday rejected the government's proposal for financial authority to oversee war reconstruction in Tamil majority areas.

The militant outfit in a statement criticised the government for not specifying the extent of the rebels' involvement and for rejecting the group's proposal of a powerful interim administration.

The LTTE pulled out of the Oslo-brokered talks in April citing the government's laxity in implementing decisions taken during six months of negotiations, particularly in the reconstruction of war-hit areas and rehabilitation of the displaced.

In a bid to prod them to resume talks, the government earlier this week offered a compromise solution of an administrative body, which would oversee development and investment in the island's disputed north and east.

The LTTE, however, said, "The proposed new structure for rehabilitation and development will turn out to be a new apex bureaucracy administratively linked to several other inefficient and defunct state agencies and mechanisms and will not be able to carry out the immense humanitarian task efficiently."

The rebels last week demanded the immediate setting up of an interim administration giving them virtual control of the north and east, which they once claimed as a separate state for ethnic Tamils.