Police have defused a powerful bomb in the Sri Lankan capital, Colombo, close to an area where many police officers live.

The discovery comes a day after a suspected letter bomb, addressed to President Chandrika Kumaratunga, was intercepted by staff at the presidential office.

The bomb was discovered by a passer-by, who noticed a suspicious device wrapped in a plastic bag and alerted police.

It contained 250 grammes of plastic explosive and was packed with ball bearings, which could have caused massive damage and casualties if it had gone off.

Police said the quantity of explosive matched that found on a suicide bomber who killed herself outside the offices of Prime Minister Sirimavo Bandaranaike earlier this month.

No one has come forward to claim responsibility for placing the bomb but the BBC's Susannah Price in Colombo says there is little doubt that it will be blamed on Tamil Tiger separatists.

Security fears

The latest discovery comes at a time of heightened fears of security in the Sri Lankan capital.

Following the failed assassination attempt on President Kumaratunga last December, there have been an increase in such attacks.

The president survived the attempt but may have lost the use of her right eye.

Police and security forces cracked down on the Tamil population in Colombo to pre-empt more attacks.

Tamils were taken in for questioning during a 14-hour curfew, as police conducted house-to-house searches.

There are fears that more suicide attacks may be planned.

Meanwhile, the Sri Lankan military said four Tamil Tiger rebels were killed in fighting in the north of the country.