A regional commander of the Liberation Tigers of Tamil Eelam (LTTE), V. Muralitharan – better known has Karuna - has broken away from the main organisation led by V.Pirabhakaran and demanded that Colombo sign a new truce with him.
The demand has triggered fresh uncertainties over the future of the current truce.
The signing of a new truce could enrage the Pirabhakaran's-faction of the LTTE and lead to a resumption in hostilities.
Karuna and his followers, on the other hand, could feel slighted if a new pact is not signed and refuse to abide by the current truce.
Karuna, a prominent Tiger commander, said he was breaking away from the dominant northern leadership because rebels from the east were overlooked for key positions despite them forming the bulk of the LTTE's fighting cadre.
His request for a defence pact was the first sign that he had left the movement, which prides itself as one of the most ruthlessly efficient organisations with zero tolerance for dissent.
The Tiger leadership in the north admitted they were facing a "crisis" but said it was temporary and would be resolved soon.
Diplomatic sources said Karuna, who is also a member of the Tiger's peace negotiating team, had on Wednesday informed peace broker Norway that he should be treated as a separate entity, signalling dissent.
The government has reacted with caution to the unexpected developments within the LTTE.
Officials insisted seeing no danger to the truce, despite voicing concern in private.
The survival of the truce is crucial, particularly since core issues of the island-country's ethnic conflict remain yet to be resolved.
The Tigers had been fighting an insurgency since 1972 demanding independence for Tamil-dominated regions. The violence has claimed 60,000 lives so far.