Local media reports quoting police intelligence said that 150 Tamil Tigers had infiltrated the north and east of the country after receiving training in southern Indian state of Tamil Nadu.
The rebels were said to have reached Sri Lanka in the guise of fishermen and were looking at destabilizing the country.
However when contacted by Xinhua, police spokesman Ajith Rohana said that the police did not have any information of such infiltration, adding that such claims were misleading.
Sri Lankan Prime Minister D.M. Jayaratne told parliament last year that camps exist in Tamil Nadu where the rebels are being trained.
He said that there were three such secret training centers and in one of the camps cadres are given exclusive training on assassinations.
The prime minister also said that there was a conspiracy to kill Indian leaders and create a civil war in Sri Lanka.
The Tamil Tigers were believed to have been responsible for the assassination of former Indian Prime Minister Rajiv Gandhi.
In May this year Sri Lanka celebrates three years since the end of a 30-year war with the rebels who had fought for a separate homeland for the Tamils.