Media reports Thursday quoted Akashi as saying in Tokyo that Japan was considering a review of its aid policy if the war intensifies.
"We could be forced to review our aid policy if military action keeps escalating, although Sri Lanka wants Japan to continue it," Akashi told reporters.
"Unless the government and the LTTE choose peace, appeals from the outside world, no matter how many are made, will fall on deaf ears," Akashi said.
But Sri Lanka's Ministry of Foreign Affairs said its secretary Palitha Kohona has been assured by Akashi that Japan's aid policy remains unchanged.
"In a telephone conversation with Foreign Secretary Kohona, Ambassador Akashi, the Japanese peace envoy, vehemently denied that Japan was reconsidering its aid pol