Sri Lanka's prime minister on Monday moved to revive stalled peace talks with the Liberation Tigers of Tamil Eelam, offering to meet their key demand for an interim administration for the island's Tamil-majority northeast.

Speaking at the start of a donors' conference in Tokyo, Ranil Wickremesinghe also said his government would consider calling a referendum to endorse changes to the country's constitution that could be part of a final solution to the 20-year conflict.

"We will introduce constitutional reforms when we have negotiated a final political solution, which we are fully committed to take to the people of Sri Lanka through a referendum for the ultimate decision," he told the conference, itself seen as a crucial step towards cementing the fragile peace process.

The rebels refused to attend the Tokyo meeting and walked out of peace talks in April citing the slow pace of rebuilding in war-torn Tamil areas.

But they have said they would consider resuming talks if the government agreed to an interim authority, which it had previously rejected as unconstitutional.

Wickremesinghe's offer of a provisional authority came as representatives from more than 30 countries and 20 institutions began pledging funds expected to total around $3billion over three years that will be tied to further progress towards peace.

Japan offered up to $1billion in aid over the next three years, but said it was conditional on concrete steps towards peace.

"Neither party should assume that the assistance by the international community would be provided automatically to them," Foreign Minister Yoriko Kawaguchi told the donors' meeting.

"The international community must review and monitor closely the progress of the peace process," she said.

The aid is aimed at providing all sides with an incentive to accelerate the peace process after a 16-month ceasefire rather than return to a war that has claimed 64,000 lives.

The Tamil Tigers, reacting on the weekend to reports that the government would make the offer of an interim authority, had said they wanted to see concrete proposals.

Wickremesinghe said a provisional administrative structure would enable the Tigers to play a 'significant role' and would have to be 'efficient, transparent and accountable'.

Its powers would include rebuilding the war-ravaged economy, resettlement of people and the provision of essential services.

"It was clear that the structures we had put in place were too cumbersome and too distant from the people to be acceptable or to react quickly enough," Wickremesinghe said.

He added that since the new structure needed to safeguard the interests of all communities in the northeast, a Muslim delegation should join the peace talks when they resume.

US Deputy Secretary of State Richard Armitage joined other delegates in urging the Tigers to return to the negotiating table and said they still had a long way to go to prove they were a legitimate political force.

"The group that pioneered the practice of turning its sons and daughters into human bombs is going to have to work hard to build trust and convince the world that it is capable of playing a legitimate role in the political life of Sri Lanka," he said referring to the Tigers' use of suicide bombers over the years.