Sri Lanka's secretary of foreign affairs Palitha Kohona said Wednesday that up to 30 percent of the Tamil Tigers' external funding was raised in Australia.

"In Australia there is a very well-made network of fundraisers who are supporting the LTTE terrorists' activities in Sri Lanka," he told the Australian Broadcasting Corporation.

He estimated the Tigers raised 10-30 million US dollars a month throughout the world, adding: "Approximately 20-30 percent of that comes from Australia."

But Australian Foreign Minister Alexander Downer dismissed the figure.

"I think that's probably an exaggeration," he told reporters.

"But we have been, for a long time, concerned that finance for the Tamil Tigers, some of it comes from Australia -- probably nothing like 30 percent -- but small amounts do come from Australia."

It was difficult to collect evidence that money raised in Australia for "so-called 'Tamil Welfare Causes'" was paid directly to the Tamil Tigers, he said.

The two Melbourne businessmen, Aruran Vinayagamoorthy, 32, and Sivarajah Yathavan, 36, were arrested after a series of raids in Melbourne and Sydney.

Melbourne Magistrates' Court was told the pair faced three charges each of being a member of a terrorist organisation, providing support or resources to a terrorist organisation and making funds available to a terrorist organisation.

They face a maximum of 25 years in jail.

The Tamil Tigers have waged a 35-year battle for independence that has claimed more than 60,000 lives in Sri Lanka.

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