Italian investigators who have arrested 33 Liberation Tigers of Tamil Eelam (LTTE) activists said the alleged terrorists were collecting more than 3.5 million British Pounds worth of money to be deposited in Swiss Banks to bankroll a war in Sri Lanka.

"Eight people were arrested in Naples, 7 in Palermo, 3 in Genoa and the rest between Biella, Rome, Bologna, Mantova, Reggio Emilia" where the money was raked up by the Tigers through illegal activities of extortion and drug sales, Police said.

According to the Police the anti-terrorist investigations started in Italy after a complaint that some Tamils living in Italy were threatened by others, about two years ago.

Police investigators said, a whole net work of Italy based Tamil Tigers extorted money from Tamil ethnic population in Italy demanding monthly payments and threatening with retaliatory steps if the monthly payments are missed.

The suspects are charged with extortion as well as for being in an international terrorist organization.

The AGI news service in London said , "According to the investigators, the Tamil Tigers collect 100 million per year worldwide for the anti-Singhalese cause, a quarter of this amount in Europe and, in particular, 3.5 million in Italy."

The Neapolitan police team has also discovered a kind of intelligence service in the LTTE called TIG, which controls people from Sri Lanka of the Tamil ethnic group resident in Italy, holding detailed files and photos, both of supporters and non-supporters of the organisation.

Investigators have also arrested five further Tamils in island of Sicily in the city called Palermo in addition to the 33 in the mainland.

Luigi Bonacura of the Naples police said the operation effectively dismantles the Tamil Tiger network in Italy.

Antonio Sbordone, a Counter Terrorism official said some 200 police were involved in the operation which saw raids across the country from Naples in the South to bologna in the North, and also on the island of Sicily.

The communities of Sri Lankans living in Italy were pressured to contribute money to the LTTE cause, and then the funds were funnelled out of Italy through Swiss banks, a Palermo Prosecutor Antonio Ingroia said. ``Then we sort of lost track of the money trail,'' he said. Investigators are still trying to determine if they can also charge the collectors for extortion, he said.