Monday, August 7 2006 11:46 Hrs (IST) - World Time -

Colombo: Sri Lanka appeared headed towards full scale war today as troops shelled Tamil Tiger positions in the north-east, holding up a deal worked out by the rebels and peacebroker Norway to open a canal at the root of intense fighting that killed 425 people and led to a massive exodus.

The shelling came hours after Norway's peace envoy Jon Hanssen-Bauer clinched a deal with Liberation Tigers of Tamil Eelam (LTTE) to open Maavilaru canal that the rebels had blocked on July 20, in exchange for the government giving them a new drinking water scheme.

Rejecting LTTE's offer, Colombo asserted it did not want 'terrorists' to open the waterway and said it should have been included in the discussions.

Security forces fired over 100 rounds of artillery when Nordic truce monitors and Tigers approached the 'anicut' (mini dam) to open its sluice gates and give water to some 15,000 farmer families downstream, Tamil Tiger spokesman S Puleedevan said.

The firing scuttled their move to release water, he said.

While announcing the deal earlier in the day, LTTE had said that they would consider resumption of air or artillery attacks by Lankan troops as a return to full scale war.

Government spokesman Keheliya Rambukwella said they were not willing to cut any deal with the Tigers over water.

"Water should not be a negotiating tool," Rambukwella said.

"We don't want terrorists to come and open the water way. They must simply allow irrigation engineers to do it, otherwise we will open it anyway," he said.