TORONTO - Eight non-profit organizations and five companies are operating in Canada as fronts for the Tamil Tigers terrorist group, according to secret intelligence documents that provide the first official confirmation that the Liberal government has received explicit warnings that the country is being used as a base for murderous operations overseas.

The Canadian Security Intelligence Service report, distributed internally this year and obtained by the National Post, shows that several organizations and businesses within Canada are suspected by the government of being linked to the Liberation Tigers of Tamil Eelam (LTTE), Sri Lankan insurgents who specialize in suicide bombings and political assassination.

When the report's core allegation was put to them, the named non-profits denied being fronts and said the money they raise in Canada is used to assist the 700,000 victims of war displaced by fighting in the jungles of northeast Sri Lanka.

Sita Sittampalam, president of the Federation of Associations of Canadian Tamils, an umbrella group that speaks for Canada's Tamil community, said: "I think that's a mistaken report and we don't agree with that ... These are Canadian organizations."

The emergence of official documents in which the federal government's own intelligence service names Canadian-based organizations as giving aid to one of the world's most brutal terrorist armies could rebound on the government of Jean Chrétien. The Prime Minister, his Finance Minister, Paul Martin, and other Cabinet ministers have defended their moral and financial support of groups named in the CSIS report and have accused Opposition party critics during question period of being motivated by racism rather than genuine concern for national security.

The CSIS report, which was distributed to other federal government departments and agencies, says that between one and two million dollars is raised here each year for the Sri Lankan guerrilla group, making Canada one of the largest contributors worldwide, and alleges that some of the money is being channelled to the LTTE's weapons procurement arm in Thailand.

The leaked report is the latest suggestion that Canada has become a crucial support base for some of the world's most notorious terrorist organizations. Despite being labeled as "LTTE Front Organizations in Canada," some of the groups on the CSIS list receive federal, provincial and local government grants totalling millions of dollars and have hosted Canadian politicians at their functions.

The Tigers have traditionally raised money through the use of front groups such as the World Tamil Movement (WTM) and Tamil Rehabilitation Organization (TRO), which collect money for humanitarian purposes, the report says. "However most funds raised under the banner of humanitarian organizations such as the TRO are channeled instead to fund the LTTE war effort."

Designated by CSIS as fronts are: WTM (Toronto), Tamil Eelam Society of Canada, TRO, Federation of Associations of Canadian Tamils, Tamil Co-ordinating Committee, Eelam Tamil Association of British Columbia, WTM (Montreal) and Eelam Tamil Association of Quebec.

The Tigers are so reliant on Canadian funds that they asked WTM fundraisers last year to garner an additional $10-million, the report says. It is not known whether the target was reached -- it was considered by Canadian intelligence analysts to be "not unrealistic" -- but the request indicates just how important a lifeline Canada has become for the guerrillas, the report said.

Only the WTM and TRO are accused by name in the report of raising money for the Tigers. Both denied the allegations. "Not true at all," said Raj Gunanathan, the TRO president. "If there are people who are interested in collecting funds for the LTTE, they will say so and do that. They don't need to go behind a shield."

Abi Singam, a director of the WTM branch in Toronto, said: "I don't think we are a front organization to anybody, so I would categorically deny that allegation. As far as the details of it is concerned I don't think I would really want to discuss that now because I haven't seen the report."

Civil war erupted in Sri Lanka in 1983, when the newly formed Tamil Tigers, seeking independence for the island's Tamil minority, launched an attack against the military, inflaming ethnic tensions between the Sinhalese majority and Tamils, who make up 17% of the population.

The ethnic rioting and warfare that followed set off an exodus as tens of thousands of Sri Lankan Tamils sought refuge in the West. While most of the refugees came to Canada to flee the violence of their homeland, a minority continue to support the Tigers' violent separatist campaign by holding rallies and collecting money. The CSIS document suggests that this support activity crept into prominent organizations in Canada's Sri Lankan Tamil community.

Although the LTTE has long collected donations from the Snow Tigers -- as Canadian supporters of the insurgent force are known in Sri Lanka -- the money-making schemes have become increasingly innovative, the report says.

The latest strategy involves the use of "front companies." The businesses serve a dual purpose: They generate profits that pay for the war effort while also providing "a covert conduit for directing funds to the LTTE's main procurement offices in Thailand."

According to CSIS, two import/export companies were established in Toronto recently at the request of Tharmalingam Shanmugham, also known as KP or Kumaran, the Tigers' chief arms buyer. They are run by "known LTTE supporters," one of whom is a close friend of Kumaran's, the report said. The other is run by someone "responsible for raising and distributing funds on behalf of the WTM," it adds.

"While there is no direct evidence linking the fundraising by LTTE front organizations in Canada to LTTE weapons purchases, there is a strong link between individuals involved in fundraising on behalf of the World Tamil Movement and Kumaran," the report said.

Money transfers to Kumaran are hidden through a price-fixing scheme, CSIS alleges. The Canadian companies get most of their inventory from Kumaran's food export company in Thailand. But CSIS says the invoices are "fixed" such that they demand payments well above the actual costs.

The difference is laundered back to Kumaran upon payment of the invoice, CSIS alleges. "The laundered amount would most likely be the funds raised by the WTM and or profits generated by the front companies," the report said. It also noted that Kumaran's invoices were well above those of other suppliers and that the amounts were paid up immediately. This "may indicate that these funds are destined for more urgent requirements than day-to-day business transactions."

CSIS also notes that Kumaran sent unusually large invoices in July. The LTTE traditionally steps up its military activities at that time of year to mark Black July, the name of an outbreak of ethnic violence in July, 1983, when hundreds of Tamils were killed in race riots that broke out in response to the LTTE's first suicide bombing.

"This amount is significantly higher than invoices received during the rest of the year from Kumaran, possibly indicating that the money is used to help fund the LTTE activities in Black July," CSIS says.

Three other Canadian companies are suspected of providing funds to the LTTE. "Although there are no official profit figures available for these companies, there is some indication that they are highly lucrative and that the LTTE are becoming increasingly dependent on these type of ventures to supply their war coffers."

The Canadian businesses are part of a highly secretive network of companies, bank accounts and money transfer and courier operations that channel funds to the guerrillas to finance their independence war -- a system so sophisticated it is sometimes referred to as "Tigers Inc."

"The LTTE operates like a multinational corporation with a network ... all over the world. This network consists of commercial companies and small businesses set up in Malaysia, Singapore, Bangladesh, China and some Western countries," CSIS says. It also includes political offices, procurement offices and aid and humanitarian organizations in at least 40 countries.

The Tigers have been labelled a terrorist group by Canada and the United States because of their tactics, which include sending suicide bombers on to buses and trains, killing government soldiers with remote-control landmines and slaying political opponents. Three people were killed and 20 more injured Wednesday when the Tigers bombed a passenger bus using a claymore mine.

Mr. Sittampalam, president of FACT, said ethnic Tamils in Canada feel strongly about the treatment of Tamils in Sri Lanka and that sympathy may have been wrongly interpreted by authorities. "We feel for it, therefore we do a lot of things here to help our people, and in the course of it maybe that might look as though we are doing things," he said, "but we have a reason. We have people who have been affected. I was one who was affected. I was a refugee when I came to this country ... I have seen my own people being tortured or harassed, our MPs being stoned or beaten up so these are things that work on us and that is why we have a strong feeling about this matter.

"But there is a lot of exaggerated versions of things [in the] press as well as by intelligence services and so on. We do want to help our people because we feel for them and when I do something, I mean my own sister, my own sister's son was shot by the army so naturally I have a feeling for that."

The secret document listing the alleged fronts was obtained from a source outside CSIS, which does not publicly disclose its targets. Dan Lambert, the CSIS spokesman, said the agency could neither confirm nor deny the document was produced by CSIS. But sources have confirmed it was produced and distributed by the intelligence agency within the past year.