"One of the consequences is the freezing of the [group's] assets," an envoy said of the decision taken at a regular meeting of EU ministers in Brussels on Monday.

The EU freeze on assets could hurt the war chest of the Tigers, which have used past trips to Europe during peace talks to raise funds from expatriate Tamils.

More generally the ban is a diplomatic slap in the face for the group, which has sought to project an image abroad as viable leaders of a de facto state they want recognised as a separate homeland for ethnic Tamils in the island's north and east.

The United States, Canada and Britain have already listed the Tamil Tigers as a terrorist group. The EU imposed a travel ban on the group's cadres last September and said then it was considering banning it for "use of violence and terrorism".

The Tigers pulled out of peace talks aimed at ending the island's two-decade civil war last month. They have said in recent days an EU ban would only "exacerbate the conditions of war" and could deter them from resuming peace negotiations.

More than 280 soldiers, police, civilians and rebels have been killed in attacks ranging from suicide bombings to naval clashes since February in what monitors of a 2002 truce and the Tigers themselves now call a "low intensity war".

Frustration among Sri Lankans is palpable as many fear a return to a full-scale war that killed more than 64,000 people before the ceasefire and displaced hundreds of thousands more.

"I don't think the ban is going to achieve very much," said Paikiasothy Saravanamuttu, an analyst with the Colombo-based Centre for Policy Alternatives.

"I can't see any way out of ... moving towards large-scale hostilities."