The government says the EU demands are an "insult" to Sri Lanka

The EU was particularly critical of alleged human rights abuses during the last stage of the war.

The suspension comes after the government failed to make a written promise of progress on three human rights conventions, which deal with torture, children's rights, and civil and political rights.

Sri Lanka earlier sent high-profile delegations to Brussels and a group of clergy in an attempt to persuade EU not to suspend the trade consesions.

High profile delegation

While one delegation was headed by Attorney General Mohan Peiris, Prof. Bellanwila Wimalarathana thero and senior Catholic clergy were among the members of another such delegation.

We very much regret the choice of Sri Lanka not to take up an offer made in good faith and in line with the EU commitment to a global human rights agenda Catherine Ashton

Having failed all such efforts, the Sri Lankan government strongly criticised the EU.

The government said the demands was an insult to Sri Lankans and should be placed "in the dustbin".

The Sri Lankan government has faced repeated accusations of human rights violations carried out during its civil war against Tamil Tiger rebels, which the military won in 2009.

"We very much regret the choice of Sri Lanka not to take up an offer made in good faith and in line with the EU commitment to a global human rights agenda," EU foreign affairs chief, Catherine Ashton, said in a statement.

'Insult to Sri Lanka'

Sri Lanka's garments industry will likely be impacted the most, as it enjoys tax breaks to sell to retailers in Europe.

But the trade unions representing the industry say the immediate impact will be minimal, though the suspension will have serious repercussions in the near future.

Anton Marcus, of Free Trade Zone garment factory unions told BBC Sandeshaya that, however, the employers might try to exploit the situation as an excuse to curtail workers’ rights and job cuts.

Meanwhile, External Affairs Ministry Secretary Romesh Jayasinghe has told The Sunday Times that the 15 demands put forward by the EU could not be accepted by a sovereign nation even if it meant losing the tax concessions.