A senior US administration official confirmed that Sri Lanka’s participation in the Millennium Challenge Corporation (MCC), which is worth several million dollars in funding, has been “put on hold” as political turmoil has rocked the island.

"Because of this disruption to Sri Lanka's democratic process, we have put on hold discussions about Sri Lanka's potential participation in Millennium Challenge Corporation (MCC) programmes," a senior administration official told PTI.

"We are concerned about the extra-constitutional steps that President Sirisena has taken," the official continued.

"The longer the situation continues, the greater the risk of ethnic turmoil and violence."

Earlier this month, press secretary Laura Allen told the Tamil Guardian that “no actions are being taken either to move the compact forward or to suspend it while we assess the situation”.

The latest statement comes as amidst several warnings from the USA about Sri Lanka’s prolonged political crisis. Last week, US Senator Chris Van Hollen wrote to the Sri Lankan president, urging him to seek an end to the political crisis in the island and accept the results of the two no-confidence motions against Mahinda Rajapaksa.

Senior US policy figure Samantha power has called for “ramped up international pressure” on Sri Lanka, urging the US to consider suspending aid and imposing targeted sanctions on Colombo.