It said the government's position was made clear by Foreign Minister Rohitha Bogollagama to visiting Japanese Special Envoy Yasushi Akashi during talks between the two.
Akashi is on a three-day visit to the island in an effort to seek an end to the bloodshed.
"Responding to a query, the Foreign Minister expressed the view that there was no need to proscribe the LTTE (Liberation Tigers of Tamil Eelam) at the present time as there was sufficient legal infrastructure already in place," the statement said.
It did not specify the legal infrastructure it was referring to.
Japan, the biggest bilateral donor to Sri Lanka, has said foreign aid could be withheld if violence keeps escalating.
The ministry statement quoted Bogollagama as telling Akashi that despite its withdrawal from the truce signed in 20