Peace broker Norway on Thursday warned of escalation in ethnic conflict in Sri Lanka [Images] following the government's decision to scrap the six-year-old ceasefire with the Tamil Tigers and indicated that the Scandinavian monitors could be withdrawn from the island nation.

"I regret that the Government is taking this serious step," said Norwegian minister of the environment and international development, Erik Solheim.

"This comes on top of the increasingly frequent acts of violence perpetrated by both parties, and I am deeply concerned that the violence and hostilities will now escalate even further," he said.

Norway had facilitated the 2002 Ceasefire Agreement between the Sri Lankan government and Liberation Tigers of Tamil Ealam. The government on Wednesday night decided to scrap it amid stepped up violence in the island's embattled north.

The termination of the agreement will primarily affect the Nordic Sri Lanka Monitoring Mission, as its mandate is set out in the pact, Solheim said, adding it may, therefore, be necessary to withdraw the mission.

"This would weaken efforts to protect the civilian population, which would be most regrettable," said Solheim.

In 2000, Norway was formally invited by then Sri Lankan president Chandrika Bandaranaike Kumaratunga and the LTTE to act as facilitator for the peace process in the country. The invitation was renewed by president Mahinda Rajapakse in January 2006.

Despite the escalation of violence, Norway is maintaining a close dialogue with the parties, the statement said.