In the latest development, the government has demanded the immediate reinstatement of three ministers sacked by President Chandrika Kumaratunga.
Prime Minister Ranil Wickremesinge, meanwhile, is in Washington, where the Bush administration has delayed signing a free trade agreement because of the political crisis.
The cabinet demanded that the defence, interior and information ministers should resume their posts, said government spokesman GL Peiris on Thursday. They also called for the re-convening of parliament, suspended by Kumaratunga for two weeks.
The cabinet asked the secretaries of ministries to remove Kumaratunga appointees from a state television station and the main state-run publishing house.
“The cabinet expressed its firm opinion that any change of portfolios and subjects should not be made by the president without prior consultation with the prime minister according to the written instructions of the attorney general," Peiris said.
Kumaratunga is the head of cabinet, but she did not attend its meeting on Wednesday.
Prime Minister Ranil Wickremesinghe was in Washington for a meeting with President George Bush when Kumaratunga pulled the rug from under his feet by sacking three of his ministers.
Wickremesinghe is now on his way to Sri Lanka and is expected to be back on Friday.
Free trade deal delayed
In a related development, the United States delayed finalising a free trade agreement with Sri Lanka during the prime minister’s visit because of the island's political crisis, said Peiris.
Wickremesinghe was keen to finalise the trade pact with Washington, which is the island's largest trading partner and the biggest market for its key garment exports, said Peiris.
“The US was ready to finalise the agreement during the prime minister's visit. Now the US has decided not to do this and they will wait for the parliament to assert full authority," Peiris said.
Wickremesinghe (L) was hoping
to seal free trade deal with US
There had been 2000 cancellations of planned holidays in Sri Lanka due to the turmoil, in which troops had set up checkpoints on major Colombo streets, he added.
Sri Lanka's tourism industry, devastated by three decades of ethnic bloodshed, has expanded dramatically since the government entered a ceasefire with Tamil Tiger rebels in February 2002.
Colombo has been in an uneasy cohabitation since the president's party was defeated at parliamentary elections by the Wickremesinghe's party in December 2001.
Kumaratunga has since accused the government of making too many concessions to Tamil Tiger rebels.
Meanwhile, Sri Lankan troops set up road blocks and checked identity papers of pedestrians and motorists in the capital, under a state of emergency declared by Kumaratunga, said officials.
Heavily-armed soldiers were seen guarding state buildings and police increased patrols.
The barricades on main roads and police checks were reminiscent of security measures at the height of the three-decade conflict.
The "armed forces and police must work together with understanding and no misuse of authority when duties are conducted,” said acting police chief Indra de Silva.
In written instructions to all police stations in the country, de Silva ordered "intelligence gathering" and "prompt" action without further explanation.
The emergency gives security forces the right to detain people for long periods, but the extent to which the sweeping powers will be used is yet to be seen.
Senior police officers said they could not immediately act under emergency laws because they did not know the rules brought into effect.
Government Printer Neville Nanayakkara said that although the president ordered a gazette notification of the emergency from midnight on Tuesday, the regulations would only be released on Thursday.
The emergency would last 10 days, the maximum allowed under the constitution without ratification by parliament, said Nanayakkara.