This report strikes very close to home, with the revelation that an SBS Radio employee is linked to an organisation accused of financing the Tigers` brutal war of independence.

Our report features interviews and exclusive material uncovered by investigative reporter Graham Davis, with contributing interviews by Mike Carey and Matthew Carney.

This isn`t south Asia - it`s Wimbledon, south London, a stronghold of Britain`s Tamil community.

YOUNG WOMAN: Because obviously, we`re the younger generation, so it`s been hard for us. But we`ve come here so often, we`ve really... we are Tamils. Even in England, we`re Tamils.

While half a million Tamils have fled to other countries, this is where their hearts remain, and this is the struggle they support - the vicious guerilla war for the partition of Sri Lanka and the creation of the Eelam, an independent Tamil state.

On one hand is the Sri Lankan Government, which has sacrificed some 60,000 lives thus far to keep the country together; on the other, the most sophisticated and ruthless guerilla organisation in the world today - the LTTE, or the Liberation Tigers of Tamil Eelam, better known as the Tamil Tigers.

DAYAN JAYATILLEKE, POLITICAL COMMENTATOR: What they`ve done is abhorrent. It can`t be justified as some kind of national liberation organisation, because they have broken all the rules of the game. But still, they function, they prosper, they network - they get away with the serial assassinations of democratic leaders, of human rights activists.

Tonight, Dateline sheds new light on this most shadowy of terrorist groups. We visit the beleaguered capital of Sri Lanka, where the Tigers seemingly strike at will, and we go undercover in the Tamil community worldwide to find out who finances the guerilla campaign.

From the Israeli port of Haifa to Zimbabwe`s capital, Harare, we end up here, at an exclusive Sydney apartment complex - home to an Australian arms dealer who has shipped guns and ammunition to the Tamil Tigers.

DR ROHAN GUNARATNA, CENTRE FOR THE STUDY OF TERRORISM: He was a principal supplier to a number of Sri Lankan Tamil terrorist organisations in the 1980s.

And we trace the influence of the Tamil Tigers into our own SBS, where a Tamil radio employee heads an organisation linked to the terrorist group.

Equally disturbing is the extent to which Tamil supporters of the Tigers have cultivated contact with some of the highest-level politicians in the land - amongst them, Federal Heath Minister Dr Michael Wooldridge.

The struggle for an independent Tamil homeland began in Sri Lanka - then Ceylon - 44 years ago. The Tamils, an ethnic minority, wanted an end to discrimination. Riots gave birth to calls for an independent homeland in the north and east of the island, and over the years, rebel groups slaughtered thousands in their push against the government.

Counter-attacks by government troops have inflicted terrible casualties on the Tamils, too, as shown here on a Tiger propaganda video - one of many such films circulated by the Tigers to bolster support for their cause.

The Liberation Tigers of Tamil Eelam remain the only rebel group that refuses to come to the negotiating table. They say they will only talk if they`re promised absolute independence.

The Tigers are now more successful and more powerful than ever before, and they`ve grown from a tiny guerilla force into a full-time army capable of fighting a conventional war.

DAYAN JAYATILLEKE: We`re talking not about some kind of romantic guerrilla movement of bearded young men somewhere in a jungle or a mountain - we`re talking about something very close to a Pol Pot type of fanatical organisation.

But how could such a small group, confined to an island in the Indian Ocean, build such a massive military infrastructure?

Political commentator Dayan Jayatilleke has studied the rise of the LTTE and that of its charismatic leader, Vellupillai Prabhakaran.

DAYAN JAYATILLEKE: He`s a man with a tremendous ego, a tremendous sense of vision, of ambition of the Tamil nation. He`s bigger than Bill Gates. Bill Gates crashed - Prabhakaran hasn`t. He stands at the intersection of ethnic nationalism and success.

Prabhakaran`s vision has now seen the influence of the Tamil Tigers spread all over the world and the development of a sophisticated undercover finance network that funnels $4 million a month into Prabhakaran`s ruthless machine.

DR ROHAN GUNARATNA: They would have a standard tax from every working Sri Lankan Tamil, and that amount has to be paid. I do not know the current amount in Australia, but I can tell you that the current amount in the UK is 300 British sterling pounds.

REPORTER: A year?

DR ROHAN GUNARATNA: A year, per family.

Rohan Gunaratna, a Sri Lankan national, is a world authority on the Tamil Tigers and their international operations. He lectures at Scotland`s St Andrew`s University.

DR ROHAN GUNARATNA: And of course, Sri Lankan Tamils who are doing business, who are doing trade, who have a high income will be expected to make a bigger contribution. Other than that, the LTTE screens LTTE films of attacks against the Sri Lankan security forces, and they would ask people who come to watch that film to make a contribution. Then they would organise dances, festivals, cultural shows, food festivals, exhibitions and such events, and then they will charge at the door.

At such cultural gatherings, all are expected to participate. Here in Toronto, Canada, Tamil children celebrate the Tigers as heroes and the war as just and right.

TAMIL CHILDREN`S SONG: Tiger Uncle, Tiger Uncle

Come home

We want to hear your stories...

In the corridor outside, Tiger propaganda is openly displayed. The proceeds from the sale of LTTE paraphernalia go directly to the masters of the independence struggle.

More than 225,000 Tamils now live permanently in Canada. It`s the largest Tamil community outside Sri Lanka. While some came here seeking peace and refuge, a new life in a new land, many Tamils have brought their struggle with them, and the bloody push for independence in their homeland is a cause they still openly, even proudly support.

SEETA SITTAMPARAN, FEDERATION OF ASSOCIATIONS OF CANADIAN TAMILS: We are mostly contributing towards the humanitarian purposes.

REPORTER: This money is still going to the LTTE, though, isn`t it?

SEETA SITTAMPARAN: Well, it`s going to areas controlled by the LTTE, but it is specifically destined to serve the basic needs of the people who are living as refugees, and under difficult situation.

REPORTER: The LTTE controls these areas, though?

SEETA SITTAMPARAN: Yes, those areas are controlled by LTTE.

As befits this most secretive of organisations, key LTTE operatives stay undercover and out of sight. It`s left to mainstream community leaders like Seeta Sittamparan to strike a respectable public face. He heads the Federation of Associations of Canadian Tamils - a body labelled by the US State Department as a Tiger front.

REPORTER: You do support the LTTE?

SEETA SITTAMPARAN: We do support the LTTE. We support it as a means of getting our rights and our right to self-determination - we support the LTTE.

REPORTER: And presumably you also support the principle that the means justify the end, if you get the Eelam, the homeland.

SEETA SITTAMPARAN: They are fighting this as a means of getting Eelam. We support the struggle.

It`s through people like Seeta Sittamparan that the Tamil Tigers have insinuated their way into the highest levels of Canadian society. Tamils have now secured influence in Canada`s local, state and federal politics, their tentacles reaching from Vancouver to Quebec.

STEWART BELL, JOURNALIST: The government in power in Canada is dependent, to a very large degree, on ridings where there are a large proportion of ethnic voters. That`s not to put them down in any way, but the Liberal Party is, I think, afraid of taking any issue which might be perceived as being anti-immigrant or anti- any ethnic group.

Toronto newspaper journalist Stewart Bell dared to report on Tiger fundraising tactics in Canada. For his efforts, he`s been threatened and intimidated.

STEWART BELL: All kinds of accusations were thrown around. I had phone calls of a threatening sexual nature about my wife, my mother. I was told to be careful, I was told to stop reporting, I was told that Tamils were praying I would have bad karma, I guess so I`d come back in my next life as I don`t know what.

REPORTER: Spooky stuff, isn`t it?

STEWART BELL: Well, it`s intimidating. You try not to let it affect you. Personally, it just makes me more determined to keep reporting on this stuff, but you just need to be careful.

JOHN THOMPSON, DIRECTOR, MACKENZIE INSTITUTE: Prabharakan in Sri Lanka, you might want to think of him sort of as a Stalin - all the reins of power go back to him, and he`s got a tight grip on it. Followers who might be getting independent or might be getting a high profile of their own are shifted off into other positions, or even sometimes killed.

John Thompson is director of the Mackenzie Institute, respected for its research into Canada`s organised crime.

JOHN THOMPSON: It`s an insurgent group. You have to remember first and foremost, they are guerrillas - guerrillas and terrorists. But parallel to that, they`ve got a political arm and a fundraising arm, and the fundraising arm operates both through legal and illegal methods, often at the same time. The political arm exists, especially in the exile communities, to provide the conditions that support the guerillas and that support fundraising activities,

The methodical infiltration of politics and the flow of money raised from the Tamil diaspora isn`t only happening in Canada - the same game is being played here in Australia as well. There are even connections to our own network, SBS.

Dr Jay Maheswaran is Melbourne group coordinator of the weekly Tamil radio broadcast on SBS. But Dr Maheswaran is also the international coordinator of the Tamil Rehabilitation Organisation, the TRO. The organisation raises money for relief efforts in Sri Lanka, as do its international counterparts in Britain, the United States, Canada and other countries. But there are allegations that money raised by these charities ends up funding the terror campaign instead.

DUSHI RANATUNGE, JOURNALIST, `THE ISLAND`: The TRO is a very old organisation. They are a registered charity in the UK and several other countries as well. But you`ll find that many of the people who are working in this organisation are sympathetic to the LTTE, so it`s aligned to the LTTE. They have a worldwide network and their large-scale fundraising on the guise of rehabilitation.

Dr Maheswaran asserts, however, that no money from Australia`s TRO fundraising is ever used to buy guns.

DR JAY MAHESWARAN, SBS RADIO: I don`t understand why you want to link the TRO with the LTTE. TRO is not part of the LTTE and TRO is not a front organisation for LTTE. TRO is a registered charity; it is registered in Sri Lanka, it is registered in every country it functions, and it raises money for legitimate purposes.

You should be asking questions about the refugee situation there, the plight of the Tamil people in Sri Lanka. They`re exactly the people whom we support, whom we help, and here, there are nearly half a million people in the north and east of Sri Lanka who are suffering. There is no food. That`s exactly where the money is going and these are the people who are being helped by the TRO.

Sri Lanka`s High Commissioner to Australia, H.A. Bandara.

H.K.J.A. BANDARA, SRI LANKAN HIGH COMMISSIONER TO AUSTRALIA: If SBS knowingly, knowing that he`s a person attached to the LTTE and a leader of this organisation, then it`s a very unfortunate situation, because SBS employed a person who has connections with the terrorist organisation which is waging a war against a government which is a member of the Commonwealth, sharing their democratic values with other members of the Commonwealth. So it is up to SBS to look at it and enquire into.

JOHN THOMPSON: A Canadian radio show host who was a Tamil who ran his own show on multicultural radio station was told by the Tigers that they wanted him to play a tape that advertised their cause. He refused; there was a drive-by shooting - a number of shots were fired into his house.

Another Tamil ran an independent newspaper which took a line contrary to that of the Tamil tigers. They didn`t get a hold of the editor of the newspaper, but one of his distributors was physically assaulted, leg broken, van set on fire. The Tamil shops that carried the newspaper were warned by armed Tigers not to ever carry the newspaper again.

If you`re a Tamil and you`re opposed to the Tigers, there`s no way you can do it publicly and remain a part of Tamil culture in any country of refuge.

REPORTER: Right. You keep your mouth shut.

JOHN THOMPSON: Exactly.

DR JAY MAHESWARAN: Well, there has been no pressure on me whatsoever by anybody to say other than what... I have freedom to do what I want on the radio, as long as it abides by the codes of practice of SBS.

PROFESSOR C.J. ELIEZER, AUSTRALASIAN FEDERATION OF TAMIL ASSOCIATIONS: We are the people who are the underdogs in the battle. The LTTE is the only one that is fighting for our long-term benefits.

REPORTER: So there`s no way you`d renounce them?

PROF. C.J. ELIEZER: No, we cannot renounce them, though we can renounce their acts of violence.

Professor Christie Eliezer is another of the Tamils` respected public faces in Australia. A brilliant mathematician and former member of La Trobe University`s maths department, Professor Eliezer is an elder statesman in Melbourne`s Tamil community and a father figure to the LTTE.

REPORTER: Are you an agent for the LTTE?

PROF. C.J. ELIEZER: Certainly not.

REPORTER: How would you describe, then, your relationship with the LTTE?

PROF. C.J. ELIEZER: As an admirer, as an emotional admirer of the LTTE.

REPORTER: A sympathiser?

PROF. C.J. ELIEZER: Sympathiser, yes.

REPORTER: Somebody who gives the LTTE advice?

PROF. C.J. ELIEZER: I have not given them any advice.

REPORTER: Somebody who provides the LTTE with support when asked?

PROF. C.J. ELIEZER: Well, they haven`t asked me for anything, but irrespective of that, they`ll find my pronouncements at meetings and things, they`ll find them useful.

REPORTER: Useful in terms of furthering their cause?

PROF. C.J. ELIEZER: Yes, because they`re all committed to the idea of liberation, and as they are, I am, ands we do it in different ways.

So useful is Professor Eliezer to the Tamil Tigers that he`s been awarded their foremost honour, the Maamanitahar medal - a personal gift from the leader of the Tigers himself, Vellupillai Prabhakaran, for outstanding services to the Tamil community. Professor Eliezer is the first person outside Sri Lanka to have ever received the award.

REPORTER: When it said in the citation "For services to the Tamil community", what did you take that to mean?

PROF. C.J. ELIEZER: It meant my work in the federation, and my forthright statements of human rights for everybody. I think they appreciated my position in those things. I was not simply a dogmatic Tamil - I was more a Tamil citizen of the world.

And in Australia, as in Canada, the LTTE is cosying up to government. These photos show just how close they`re getting. Here, Dr Michael Wooldridge, the Federal Health Minister, is meeting Professor Eliezer at a celebration for his receipt of the Tigers` highest medal.

DR ROHAN GUNARATNA: Dr Eliezer is a very well-known supporter of the LTTE organisation. He has politically supported the LTTE, and he continues to do that. He has addressed a number of LTTE meetings where funds have been raised for the LTTE organisations.

Dr Wooldridge declined to be interviewed, but told us this was an electorate function and he was not aware it had anything to do with the Tamil Tigers. He may well have been comforted by the fact that the man being honoured with this terrorist decoration already sported an Order of Australia. But the get-together was in direct contravention of Foreign Minister Alexander Downer`s stated policy on meetings with Australia`s Tamil community.

ALEXANDER DOWNER, FOREIGN AFFAIRS MINISTER: And I just want to make it clear to the House that my position is that I won`t see Tamil groups in Australia unless they indicate to me in writing that they condemn the terrorist activities of the LTTE.

Dr Wooldridge says the fact that he attended the function in no way implies that he supports the method or aims of the Tigers. But that`s not how the Tamils saw it.

REPORTER: Were you surprised to see Michael Wooldridge at that function?

ANA PARARAJASINGHAM, AUSTRALASIAN FEDERATION OF TAMIL ASSOCIATIONS: I was surprised to see a federal minister, given Alexander Downer`s stand on this matter.

REPORTER: Pleasantly surprised?

ANA PARARAJASINGHAM: Yes, of course.

Ana Pararajasingham is secretary of the Australasian Federation of Tamil Associations.

ANA PARARAJASINGHAM: I would say that he did support the Tamil cause, otherwise he would not have been present at that meeting.

REPORTER: Was he cordial and warm to everybody there?

ANA PARARAJASINGHAM: Yes, he certainly was cordial and warm to everyone, yes. All of the people present there were very supportive of the LTTE.

REPORTER: And Wooldridge would have known that?

ANA PARARAJASINGHAM: I believe he would have known that.

REPORTER: So here is this Australian doctor who`s received honours from the leader of the Tamil Tigers also accumulating an Order of Australia.

DR ROHAN GUNARATNA: Absolutely. So I believe that the Australian government was naive in presenting this Order to Dr Eliezer.

REPORTER: Are you surprised that it happened?

DR ROHAN GUNARATNA: No, but occasionally, governments also make mistakes.

REPORTER: But we have a very through honours committee who vets people for their suitability for this kind of thing. Do you think the vetting process, in this instance, has fallen down?

DR ROHAN GUNARATNA: Absolutely.

H.J.K.R. BANDARA: If there is concrete evidence that a member of the Australian Government has attended a function organised by a front organisation of the LTTE, then it`s a matter of very serious concern for my government.

The celebration attended by Dr Wooldridge that night was an auspicious gathering indeed - also present was Tillai Jayakumar, head of the LTTE in Australia, New Zealand and Papua New Guinea. Tillai Jayakumar works as a computer lecturer at the Chisholm Institute, a TAFE college in the Melbourne bayside suburb of Frankston.

DR ROHAN GUNARATNA: I believe that he`s the member of the LTTE support network, and not a man who pulls the trigger.

REPORTER: If you`re a member of the support network, you raise money, you procure supplies - that makes you an instrument in this terror, doesn`t it?

DR ROHAN GUNARATNA: Absolutely. In fact, there was a Canadian judge who delivered a ruling on the Tamil Tigers, and in that, he says that the people who raise the funds and procure material should be equally responsible to the man who pulls the trigger.

REPORTER: And that certainly applies to Tillai Jayakumar?

DR ROHAN GUNARATNA: Yes.

Tillai Jayakumar did procure supplies for the Tigers, in the form of hang-gliders that would help make up the group`s newly formed air wing, in 1994. He bought them from this man, Rob Hibberd, owner of AirBorne WindSports - a gilder and ultralight business in Newcastle, north of Sydney.

ROB HIBBERD, AIRBORNE WINDSPORTS: He just basically asked me about some of our hang-gliders we were making at the time - we`re a hang-glider manufacturer - and so he wanted to purchase some for a friend of his in Malaysia.

REPORTER: Did he say where he was from?

ROB HIBBERD: He didn`t actually say where he was from, but I assumed he was from Malaysia because he was asking about buying gliders for Malaysia.

REPORTER: Did you get a visit from Australian intelligence?

ROB HIBBERD: We did, and that was the first time I found out that we`d sold something to Jayakumar that was an issue.

REPORTER: So somebody from ASIO came to see you - what did they say?

ROB HIBBERD: They just wanted to know the details and see the invoice.

REPORTER: And you gave that to them?

ROB HIBBERD: Mm-hm.

Rob Hibberd says he was never told how his hang-gliders would be used, but the LTTE has since developed the Tiger air wing as part of its reconnaissance and surveillance unit.

But it`s the Tigers` notorious suicide bombers who create the greatest fear amongst Sri Lankans. Volunteers wear vests like this strapped to their bodies, packed with explosives and ball bearings. It was this type of bomb that was used in 1991 to kill the former Indian prime minister, Rajiv Gandhi.

The bomber`s name was Dhanu - she was just 16. She can be seen in this photograph with her back to the camera, waiting to present Gandhi with a garland of flowers. The assassination was ordered by the LTTE`s leader, Prabhakaran, and another of the Tigers` highest honours was awarded. This time, the Maamanithar medal went to the father of the young killer.

SEETA SITTAMPARAN: Rajiv Gandhi`s assassination was something that really, generally the world didn`t accept - I can see that. But if you look into what happened in the politics of our country, you sometimes will be able to see that Rajiv Gandhi had gone too far in doing the interests of the Tamils in Sri Lanka.

REPORTER: In the interests of the Sinhalese, you mean?

SEETA SITTAMPARAN: Tamil people. He has gone to damage the interests of the Eelam Tamils.

REPORTER: And supported the Sri Lankan Government?

SEETA SITTAMPARAN: Correct.

REPORTER: Is that why he died?

SEETA SITTAMPARAN: Possibly. If it was done by the Sri Lankan Tamils, then it`s the reason for that.

REPORTER: But it was done by the LTTE - there`s no question about that, is there?

SITA SITTAMPARAN: Well, I don`t say that.

REPORTER: But the woman who carried this out is celebrated in the Tamil community as a member of the LTTE, and in certain LTTE places, her photograph is given prominence.

SEETA SITTAMPARAN: If she`s celebrated, it`s because the Tamil people feel so bad about what Rajiv Gandhi did to them. That`s probably the reason.

REPORTER: So the assassination was supported by most Tamils around the world?

SEETA SITTAMPARAN: I think so.

Just last year, another suicide bomber blinded Sri Lankan President Chandrika Kumaratunga in one eye in this attempted assassination in downtown Colombo.

The explosives used in attacks like this are part of a massive arsenal gathered from around the world. Weapons are purchased from Africa, Europe, the Middle East, Cambodia, and we can reveal tonight that they`ve also been purchased from an arms dealer in Australia.

This man (name withheld for legal reasons) has sold and shipped guns and ammunition to the LTTE. We traced him to an office building in central Sydney.

REPORTER: (name withheld) , did your company (name withheld for legal reasons) in 1984 sell arms to the Tamil Tigers? A Mr Krishnan tells us that you did.

MAN: What are you talking about?

REPORTER: I`m talking about the sale of small arms to the Tigers...

MAN: No, you`re the first time I heard this.

DR ROHAN GUNARATNA: And he sold weapons to the amount of about A$300,000 or more, and these weapons were sold under the guise of selling tea.

REPORTER: Selling tea?

DR ROHAN GUNARATNA: Tea, yes.

REPORTER: So all the documentation had it that he was selling tea, when in fact he was exporting light arms and ammunition?

DR ROHAN GUNARATNA: Yes. In fact, there was one particular consignment that was seized in the port of Madras, and the Indian Government confiscated this consignment. I believe the shipment was negotiated out of the Hilton Hotel in Hong Kong.

REPORTER: Are you a director of a company called (name withheld) ?

MAN: No. No.

But a search of the Australian Securities and Investments Commission shows (name withheld) IS linked to (name withheld) - the same company involved in the so-called `tea` shipments to Sri Lanka. His name appears as the signatory on a letter confirming those shipments. In these latest company records, he`s listed as (name withheld) current director and a shareholder.

MAN: I don`t know. I completely don`t know what are you talking about.

REPORTER: Really. Are you a director of a company called (name withheld) ?

MAN: No.

REPORTER: Have you ever exported arms, small arms?

MAN: No. No. No.

But according to terrorist specialist Rohan Gunaratna, (name withheld) signed a document in 1984 showing that he spent US$30,000 to purchase a fake "end-user certificate." End-user certificates are needed to tranship weapons around the world.

REPORTER: Have you ever been involved in the armaments industry?

MAN: Never, ever. Who was this that said that?

REPORTER: Mr Krishnan.

MAN: Who is Krishnan?

REPORTER: He used to be with the Tamil Tigers organisation - the Liberation Tigers of Tamil Eelam.

MAN: I`ve never been involved in that part of the world at all. Never been once in Sri Lanka.

N.S. Krishnan is the former chief weapons buyer for the Tamil Tigers. He says he DID do business with (name withheld) on several occasions. We caught up with him in London.

REPORTER: What did you ask (name withheld) to get for you?

N.S. KRISHNAN FORMER TAMIL TIGER: Foreign material for our organisation.

REPORTER: Weapons?

N.S. KRISHNAN: Weapons, yes.

REPORTER: Ammunition?

N.S. KRISHNAN: Yeah.

REPORTER: What sort of weapons and ammunition?

N.S. KRISHNAN: That time, Kalashnikov AK-47 and Viper pistol and underwater things.

REPORTER: You approached an Australian citizen who was able to give you this kind of thing?

N.S. KRISHNAN: Yes, yes.

D. SIDDHARDATHAN, CHAIRMAN, PLOTE: He is the man who was dealing with us.

In Sri Lanka, we found another man who`d done business with (name withheld) . Former militant D. Siddhardathan now heads his own breakaway group called PLOTE.

REPORTER: Your people, people from PLOTE, were dealing with him. What were they getting from him?

D. SIDDHARDATHAN: As I said, small weapons at that time.

REPORTER: Small weapons? What`s a small weapon?

D. SIDDHARDATHAN: Like these assault rifles, military assault rifles, and some LMGs - I`m not sure.

REPORTER: Some what?

D. SIDDHARDATHAN: LMGs - light machine guns. These are the things. Compared to now, those are very small weapons now.

REPORTER: Right - I know this. But he was capable of delivering you assault rifles and light machine guns?

D. SIDDHARDATHAN: At that time, yeah.

REPORTER: Are you aware that the Australian Government took any action against (name withheld) because of these activities?

DR ROHAN GUNARATNA: No, they didn`t.

REPORTER: So here is an Australian citizen supplying weapons and ammunition to a terrorist organisation, and no action was taken at all?

DR ROHAN GUNARATNA: Yes, but in defence of the Australian Security and Intelligence Organisation and the Australian law enforcement authorities, what I would like to say is that during that period, the Australians were very complacent about the activities of this group, because they were not very clear whether this group was a terrorist organisation. It was only after the Tamil Tigers assassinated Rajiv Gandhi, the former PM of India, by sending a female suicide bomber, that the Australians became fully aware that this was a ruthless terrorist organisation.

Because of the threat of legal action, we decided late today not to reveal the identity of the man we believe shipped arms to the Tamil tigers in the 1980s. We`re working with the businessman`s lawyers to clarify his involvement in the arms trade. One thing, however, is certain - the man in question misled Dateline about his involvement in a company which we believe shipped arms to the Tigers in the 1980s.

But it was the extraordinary capture of an entire shipment of mortars that`s added the biggest boost so far to the Tamil Tigers` arsenal. The weapons were ordered through Zimbabwe Defence Industries, or ZDI, here in Harare, the capital of Zimbabwe. They were initially purchased by the Sri Lankan Government for use against the Tigers.

COLONEL T.J. DUBE, ZIMBABWEAN DEFENCE INDUSTRIES: The client wanted them urgently, so we had to source them from somebody who had them.

REPORTER: Where did they come from? Can you tell me?

COL. T.J. DUBE: Well, you see, as I say, the supplier was an Israel national.

REPORTER: An Israeli national?

COL. T.J. DUBE: Yes,

The ship sailed from Africa on May 23, 1997 and within weeks, the LTTE enacted one of the boldest arms heists in military history. Somewhere on the high seas en route to Sri Lanka, the weapons supply ship simply disappeared, and its entire cargo of 32,000 mortars and other armaments ended up not in the hands of the Sri Lankan military, but instead with their mortal enemies - the Tamil Tigers.

REPORTER: What happened to them?

COL. T.J. DUBE: We are not sure what happened. In fact, as I say, the matter is still being investigated. That`s taking a long time, though. But we don`t know what happened. We`ll get to know this when the final report has been compiled.

REPORTER: You say there is an investigation going on - who is doing the investigation?

COL. T.J. DUBE: Interpol.

The Israeli middle-man used by ZDI was Sapier Ben Souk, operating out of this building in the port city of Haifa. Intelligence sources believe Ben Souk double-crossed the government of Sri Lanka. But when we went to ask him what he knew of the heist, our cameraman was assaulted and the videotape was forcibly removed from his camera.

REPORTER: Why would he be so sensitive about this?

DR ROHAN GUNARATNA: That does not surprise me, because as you know, people who deal in arms, the have blood money in their hands, and they wouldn`t mind these weapons going to kill people. So people who deal in arms, basically they have no principles.

REPORTER: You`re saying this guy`s a crook?

DR ROHAN GUNARATNA: And I believe the fact that he has been dealing with a group that has killed not only people in Sri Lanka but overseas, I think he`s a man without principles.

REPORTER: A crook?

DR ROHAN GUNARATNA: Yes, absolutely.

The remarkable theft of the mortars marked a turning point in the war in Sri Lanka. No longer was the LTTE a rag-tag, hit-and-run terrorist group - it was now a fully-fledged fighting force with comprehensive military capability.

The group celebrated the success of the sting by sending this fax to the US Embassy in Colombo.

LTTE STATEMENT: "We, the Tamil Tigers, inform you by the present that on 11 July, 1997, we have hijacked a vessel carrying arms destined for Colombo. We make known and warn that we will take action against all persons participating in the supply of military equipment used against the legitimate rights of Tamil people and we will severely punish those concerned."

The Tigers` newfound power was quickly demonstrated as the war began to turn. The Sri Lankan military incurred massive losses against the advancing Tiger fighters. The hijack has given the Tamil Tigers the ability to fight on for years to come and to continue their terror campaign against the civilians of Colombo.

DAYAN JAYATILLEKE: There is an invisible geography, a landscape of death in this city. In a perverse way, I suppose it`s also on of the things that`s kept me here. There are so many places which are very normal outwardly, very common - places that you pass to and from work every day. But it has some memory.

Kingsley Road, there`s graphically on the road where one man was blown up by a suicide bomber - I was on my way to meet him that morning. Armour Street in Grand Pass, which is close to where I work, is where President Premidasa was blown up on the sidewalk. Duplication Road is where the former Sri Lankan Minister for Defence, was blown up by a remote-controlled bomb.

These days, Colombo is a city under siege. No-one knows where or when the LTTE will hit next.

DAYAN JAYATILLEKE: And you get used to this. Sometimes you`re breakfasting or you`re dining and you hear this huge explosion, and the pressure from the explosion - you could be quarter-mile, half a mile away and the shockwave moves you in your chair. And you wonder what it is; no, you`re used to it - you know it`s an explosion. We were having dinner when the explosion at Town Hall which almost killed the President took place, and then the phones start ringing.

It`s a kind of life that in a way, it`s quite crazy, but it`s become normal. And that normality sometimes scares you. You feel alienated by normality, because you`re used to the rhythms, you`re used to the speed of this roller-coaster of the Sri Lankan crisis.

However the war in Sri Lanka plays out and whoever ends up gaining the military advantage, one certainty remains - death will haunt this city and this country as long as weapons and money flood in from nations like Canada, Britain and Australia.

But with the Tigers having forged a quasi-corporate structure, with Prabhakaran acting as CEO and military commander, the money and arms should keep flowing and the war will continue.

JANA WENDT: SBS managing director Nigel Milan was approached by Dateline, but declined to appear. Instead, Mr Milan provided a short statement:

STATEMENT BY NIGEL MILAN: SBS management takes very seriously claims of a potential conflict of interest relating to an SBS employee made by the Dateline program. The matter is being fully investigated.