"Sri Lanka’s key lenders will hold fresh talks with the Tigers to assess tsunami damage amid hopes of finalising a reconstruction plan estimated to cost 1.5 billion dollars, officials said Monday," an AFP report said.

The report by AFP added: "The Asian Development Bank (ADB), the Japan Bank for International Cooperation (JBIC) and the World Bank (WB) will hold talks Tuesday with Tigers, although the Government has yet to agree with the rebels on aid delivery.

World Bank country director Peter Harrold said they expect

the warring parties to decide on a joint mechanism while the lending institutions go ahead with talks with the Tigers on an immediate needs assessment report.

"We understand discussions are going on (between Colombo and the Tigers) about disbursements in the northeast," Harrold told reporters. "We expect some agreement."

Tuesday’s meeting will be the first between the three lenders, who account for 80 percent of international aid to Sri Lanka, and the LTTE since the 1.5 billion dollar needs assessment report was unveiled earlier this month.

The lenders’ report said Sri Lanka will need 1.5 billion dollars for recovery and reconstruction.

Their assessment was at variance with the government plan which envisaged spending 3.5 billion dollars. Harrold said Colombo had taken longer-term needs into account.

The World Bank was ready to redirect 75 million dollars from ongoing bank-assisted projects while another 75 million dollars will be available in new funding, Harrold said.

The ADB’s country director for Sri Lanka, Alessandro Pio, said they were diverting 35 million dollars from ongoing ADB-assisted projects towards tsunami relief while another 150 million dollars will be available in new funding.

JBIC chief representative here, Shinya Ejima, said they had yet to commit new money. The Japanese government has already given 81 million dollars to Sri Lanka.

"We are looking at the next three years to provide about 500 million dollars for reconstruction work," Ejima said.

The three lenders said they preferred Sri Lanka to finance recovery through grants rather than loans and said they expected at least a third of the funding needs would come from private donations".