'Known as the Karuna Group, it has abducted between 300 and 900 children some as young as 12 -- since March, according to international and local aid workers. Its escalating activity has emerged as a key factor behind the upsurge in violence that has killed more than 2,000 people this year and left a 2002 ceasefire agreement in tatters,' says the article.

According to the article, 'Batticaloa residents and Norwegian-led truce monitors say that they regularly see Karuna members --armed and in black uniforms or civilian dress -- working alongside troops and police. They say that government forces allow Karuna to transport children through dozens of checkpoints on the way to a training camp near the town of Welikande. Karuna's political wing, the Tamileela Makkal Viduthalai Pulikal, or TMVP, has opened several offices around eastern Sri Lanka recently, many beside military camps,' it says.

The Karuna factor is 'one of the main obstacles' to a negotiated settlement between the Government and the LTTE at the peace talks scheduled in Geneva Saturday, the report cited analysts as saying.

"Karuna has damaged the Tigers' image as a united, indestructible force in the east," it quoted Christian Le Miere, the Asia editor of Jane's Country Risk, as saying. "The immediate effect has been to undermine the negotiations."

Vinayagamoorthy Muralitharan, better known as "Colonel Karuna," was LTTE leader Velupillai Prabhakaran's top military commander and a former bodyguard before they fell out in 2004. While Karuna says 'he split from the Tigers because too many eastern Tamils were dying, the Tigers say he was caught embezzling money and violating their code of conduct.'

The Karuna faction has since then been fighting a bitter battle with its parent organization, and over the past year it has 'launched a series of attacks on the Tigers from government-controlled territory, weakening their grip on the eastern districts of Batticaloa and Trincomalee. But in the run-up to the peace talks the Tigers have fought back elsewhere in the country to bolster their negotiating position,' the Times article says.

'Last week they carried out their worst suicide bombing, killing more than 100 sailors near the town of Habarana, followed by an unprecedented assault on the southern tourist city of Galle.'

'Now Karuna is implicating the Government in the kidnap and exploitation of hundreds of children,' says the report citing aid workers, truce monitors, witnesses and relatives. "There is some sort of complicity by the Government in what is happening to children here," it quotes an aid worker who requested anonymity as saying. "Most people feel there is no difference between the Government and Karuna."

Analysts say that Karuna is at the heart of the Government's strategy to divide and conquer the Tigers by exploiting tensions between northern and eastern Tamils, says the Times.

National security spokesman Lakshman Hulugalle, however, asserted that "we don't have any links with Karuna, and anybody carrying out abductions will face legal action."

The TMVP, Karuna's political wing, also denied working with the government, and insists that the LTTE was recruiting children as soldiers and blaming Karuna in a attempt to discredit him.

More reports from Lanka | The war in Lanka