by Amal Jayasinghe
COLOMBO, (AFP) - LTTE calls for a "radical overhaul" of the Norwegian-backed peace bid and rejection of the government’s latest overtures Friday is seen as strengthening hawks on both sides of the ethnic divide.

The Liberation Tigers of Tamil Eelam rejected Prime Minister Ranil Wickremesinghe’s offer of political power to save the faltering negotiations and said it wanted the peace agenda "redefined."

The Tigers’ London-based chief negotiator, Anton Balasingham, said Wickremesinghe failed to give details of the proposed interim administrative council, although the rebels were unwilling to spell out how it should be set up.

The main opposition People’s Alliance of President Chandrika Kumaratunga said the government was making one offer after the other to appease the Tigers but there were no signs of a "clear policy."

"The government is like a river boat gambler fast losing all his cards," People’s Alliance spokesman Sarath Amunugama said.

The opposition party is highly critical of the government’s handling of the peace process, but says it will also talk to the Tigers if returned to power.

Another People’s Alliance stalwart, Mangala Samaraweera, told reporters that the party hoped the latest impasse in the peace process would not lead the country back to fighting.

"We pray and hope the country will not revert back to war," Samaraweera said.

The government’s chief negotiator, G. L. Peiris, expressed confidence that the country will not see fighting between security forces and the Tigers despite a string of setbacks last weekend.

A Tiger merchant vessel allegedly smuggling weapons into the island was sunk following a stand-off with the navy. The Tigers accused the navy of sinking the ship and arresting 12 crewmen. The navy denied the charge.

Peiris said the LTTE had "categorically and repeatedly" stressed that it will not revert to fighting with government forces.

"That is one risk that does not exists," Peiris told reporters, discounting fears the country could be heading towards war after a truce that is in its 16th month. "I don’t think that danger exists."

However, diplomatic sources here said the seemingly hardline stance of the Tigers has already heightened fears that the peace process could remain in trouble for sometime with a greater chance of fighting breaking out.

"No one says that there will be fighting tomorrow or the day after," a diplomatic source here said. "But, the situation now helps hardline elements on both sides to canvass their cause."

Wickremesinghe said his government was committed to opening negotiations with the Tigers on the proposed council and hoped the Tigers would return to talks.

"To resolve the present crisis and enter peace talks is the responsibility of the LTTE," Wickremesinghe said. "I am confident they will honour their responsibility."

But the Tigers remain defiant.

Balasingham said it was not prudent for the Tigers to be involved in defining the scope of the council, but that they were keen to see what the government would come up with.

Four previous peace bids ended up in failure and led to more bloodshed in the island.