Australian Foreign Minister Bob Carr has announced plans for Australia to help expand Sri Lanka’s spy network, as part of efforts to stem the flow of asylum seekers to the country.

Carr announced that Australia would be providing extra surveillance equipment to Sri Lanka as well as hosting training programs  on maritime surveillance for the Sri Lankan Navy.

Speaking in Colombo he said,

China has blocked a loan of over $69m, saying it will only release the funds once Sri Lanka pays fees to China’s state-run insurance company, reported The Sunday Times.

Beijing is blocking the payments, demanding that 7% of the loan should be paid to the insurer Sinosure, although Sri Lanka has offered sovereign guarantees.

The Chief of the Indian Army, General Bikram Singh will visit Sri Lanka this week, with the intent of discussing ways to strengthen their bilateral defence ties.

Despite strong opposition from Tamil Nadu political parties regarding Indian co-operation with Sri Lankan defence forces, the Indian Army chief will be looking to find ways to enhance the Sri Lankan Army’s training, military and hardware capabilities.

More arrests of Jaffna University students are feared, as Sri Lankan security forces claim those arrested had previous LTTE links.

The police's media spokesperson SSP Prishantha Jayakody said,

“All those arrested were involved with LTTE activities in the past and we are arresting them,”

The Canadian NDP MP for Scarborough-Rouge River, Rathika Sitsabaiesan, condemned the arrests and attacks on Jaffna university students by Sri Lankan security forces as a "clear assault on freedom of speech, freedom of assembly, and breach of human rights" and asserted it was "completely unacceptable".

The European Union has announced it will assist 4,000 families to build permanent homes in their "villages of origin" in the North-East of Sri Lanka.

EU Ambassador H.E. Bernard Savage said:

The Sri Lankan have expressed concern at the launch of a rocket by North Korea earlier this week, in a statement released by the Ministry of External Affairs.

The full statement says,

"Sri Lanka is concerned at the launch of a rocket using ballistic missile technology by the Democratic People’s Republic of Korea, which is in violation of the United Nations Security Council Resolution 1874.

Sri lanka's state run Ceylon Petroleum Company has increased fuel prices by 6.7% to help stem further losses, an official announced on Saturday.

The announcement was quickly followed by the country's only private sector fuel retailer, Lanka Indian Oil Company, deciding that it would also raise prices in line with the CPC.

The leader of Canada’s Liberal Party, Bob Rae, has issued a statement expressing concern about the student unrest in Jaffna and called for Sri Lanka to be held accountable for human rights violations.

See statement below:

In a statement released on Friday, the Tamil Refugee Council have strongly rejected comments made by the Sri Lankan High Commissioner to Australia that groups calling for a boycott of Sri Lanka’s cricket tour have “terrorist” connections.

TRC spokesman, Mal Bala said,

“The Admiral’s comments are not just laughable. It is insulting to these people to be told they are connected to terrorism”.

Responding to comments by the High Commissioner that he has brought up the planned leafleting campaigns and protests against the cricket tour with “relevant authorities”, Bala responded,

“Thanks to freedom of speech here we can do it. But if you did it in Sri Lanka you would quickly be disappeared into the bowels of a torture centre.”

See the full text of the statement below.