The two Melbourne men have been accused of sending cash raised under the guise of tsunami relief to the Liberation Tigers of Tamil Eelam (LTTE), who have waged a bloody separatist war for 35 years.
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Sri Lanka's secretary of foreign affairs Palitha Kohona said Wednesday that up to 30 percent of the Tamil Tigers' external funding was raised in Australia.
"In Australia there is a very well-made network of fundraisers who are supporting the LTTE terrorists' activities in Sri Lanka," he told the Australian Broadcasting Corporation.
He estimated the Tigers raised 10-30 million US dollars a month throughout the world, adding: "Approximately 20-30 percent of that comes from Australia."
But Australian Foreign Minister Alexander Downer dismissed the figure.
"I think that's probably an exaggeration," he told reporters.
"But we have been, for a long time, concerned that finance for the Tamil Tigers, some of it comes from Australia -- probably nothing like 30 percent -- but small amounts