A senior official - Joao Aguiar Machado - said the EU might withhold an aid package worth a hundred million dollars if the situation did not improve.

Human rights groups have accused the government of failing to control killings and disappearances since hostilities with the Tamil Tiger rebels intensified in 2005.

The government said the human rights situation in the country was improving.

The commission said the package was dependent on Sri Lanka removing barriers to humanitarian assistance, including resolving visa issues for Red Cross and U.N. workers in the country.

"We expressed our serious concerns with the human rights situation in Sri Lanka, as indicated by a range of sources including reports from United Nations rapporteurs," Deputy Director General for External Relations of the European Commission Joao Machado said in a statement.

Govt reaction

The government said the human rights situation had improved, but admitted there had been concerns about rights violations in the past.

"If you look at 2007, the situation of disappearances and other incidences are better than 2006," said Rajiva Wijesinghe, an official at the Ministry of Human Rights.

Rights watchdogs have reported hundreds of abductions, disappearances and killings blamed on government security forces and Tamil Tiger separatists since a bloody civil war, in which 70,000 people have died since 1983, resumed in 2006.