The draft of the three-year plan will be released next week and will be fine-tuned as a final document by month's end, said Mano Tittawella, senior advisor to President Chandrika Kumaratunga and head of the reconstruction task force.

The plan, he said, was was more or less in accordance with initial assessments of donors.

"We will fine tune it after some discussions with the civic society and donors and then that will be the final document which will be in line with everyone's expectations," Tittawella told AFP.

The medium-term plan envisages setting up projects across the country but nearly 60 percent of the reconstruction will be in the north and the east -- most of which is under control of the Tamil Tiger rebels.

"The plan will focus on rebuilding fisheries, small businesses and some infrastructure to help start lives of the survivors," Tittawella said.

The plan, he added, is separate from another 1.4 billion dollar aid scheme that will focus on infrastructure needs over the next decade.

"(It) is based on the damage assessments as per regions and the north and the east are the worst affected by the tsunamis," Tittawella said.

The rebel-held eastern districts of Ampara and Batticaloa and the northeastern region of Mullaitivu are among the areas battered the most by the December 26 sea waves, which destroyed nearly three-quarters of Sri Lanka's coastline and killed around 31,000 people.

But there has been sustained bickering between the government and the Liberation Tigers of Tamil Eelam (LTTE) over relief aid, with relations fraying over attempts to form a joint panel to oversee distribution.

Tensions further flared on Monday after a senior LTTE leader and four other activists were shot dead in a government-controlled area in the eastern province. Colombo warned the killings could return the nation to war.

The Tigers claim that E. Koushalyan, the political head of LTTE in the east, was gunned down along with a former Tamil legislator and the other guerrillas by rebel renegades working with the government military.

The killings have cast a cloud over the tsunami reconstruction projects, but Tittawella was hopeful that the debate over the joint panel would soon end.

"In my view there are no arguments on the substance of the mechanism, but debate is only on the cosmetic wordings. Very soon that will be resolved."

He said 90 percent of the work will be executed by donors and the government will play the role of facilitator.

"Most of the funds we envisage are by way of grants and not loans from lenders like the World Bank or Asian Development Bank, and then we have bilateral aid also coming in," Tittawella said.

"We will just facilitate and see that the donor finishes the project he chooses within a time-frame agreed upon by all the concerned parties."