COLOMBO - SRI Lanka said on Friday its troops had finally captured the unofficial capital of the Tamil Tigers, dealing a major blow to the rebel outfit and its decades-old struggle for a separate homeland.

'The national flag is now flying at Kilinochchi,' said ruling party spokesman Maithripala Sirisena, who is also minister of agriculture.

The capture of the Tigers' political headquarters - the chief target of the latest and largest military offensive of Asia's longest-running ethnic conflict - was an 'historic victory for the nation,' Mr Sirisena said.

There was no immediate comment from the Tigers who had earlier vowed to defend the town at any cost.

Situated 330km north of Colombo, Kilinochchi has served as the de facto capital of the Tigers' mini-state in northern Sri Lanka for the past 10 years.

Military officials said Sri Lankan ground troops had punched through Tiger defences at two locations in the city and were in full control of the area.

The brutal Sri Lankan conflict has claimed tens of thousands of lives since 1972.

President Mahinda Rajapakse pulled out of a ceasefire deal last year and vowed to crush the Tigers once and for all.

Since then, the rebels have been on the defensive, losing strongholds in the east of the island last year and steadily retreating in the north.

Mr Rajapakse vowed Thursday in a New Year's address that 2009 would see a final 'heroic victory' over the rebels. He was due to hold a press conference later on Friday to formally announce the fall of Kilinochchi, where the rebels had their own courts, police and political administration.

United Nations agencies and other international aid groups previously had offices in Kilinochchi, but pulled out late last year at the government's request as fighting escalated in the region.

While losing Kilinochchi would be a major setback, the Tigers have shown in the past that they have the ability to rebound from even the most dire situations.

Barely six months after government troops captured the northern Jaffna peninsula in 1995, the Tigers overran a military base in the north-eastern district of Mullaittivu, killing more than 1,200 soldiers.

The guerrillas also reversed military gains of 19 months in a matter of five days in November 1999, going on to dislodge the military from their Elephant Pass base at the entrance to Jaffna.

The government spent US$1.6 billion on the war effort last year and an estimated US$1.7 billion this year.

In his annual speech in November, LTTE supremo Velupillai Prabhakaran vowed to defend his territory and suggested that the rebels would revert to guerrilla-style, hit-and-run attacks as their area shrank.

'No sane voice is being raised either to abandon war or to seek a peaceful resolution to the conflict,' Prabhakaran said.

Over the years, the Tamil Tigers have gained a reputation as one of the world's most effective and ruthless guerrilla groups, using surprise and suicide bombers to keep their struggle alive, despite being heavily outnumbered.

The Tigers have been labelled a terrorist group by the United States, the European Union and neighbouring India, but had the backing of the international community when Oslo-backed peace talks got underway in 2002.

Human rights groups have accused the Tigers of rampant extortion and criticised their recruitment of child fighters. -- AFP