Sivanesathurai Chandrakanthan, a former chief minister of the Eastern province, was arrested by the police Criminal Investigations Department in connection with the murder of legislator Joseph Pararajasingham, police said.
Pararajasingham, 71 was gunned down inside the St. Mary's church in Batticaloa, 303 kilometres (190 miles) east of Colombo, before a packed Christmas congregation 10 years ago.
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Both the then government of Rajapakse and the separatist Tamil Tiger rebels had blamed each other for the audacious assassination, but the case was reopened only following a change of government this year.
"Based on the statements from two suspects already in custody, it was necessary to arrest and question the former chief minister (Chandrakanthan)," police spokesman Ruwan Gunasekera said.
Chandrakanthan led a breakaway faction of the Tamil Tiger rebels who were crushed in a major military offensive that ended in May 2009.
A recent UN report as well as several international rights groups have accused Chandrakanthan and his men of involvement in abductions and killings of political opponents of the then regime in collaboration with forces under Rajapakse's command.
Several military officers, including senior officers and at least two Tamil Tiger defectors are already in police custody in connection with the January 2010 abduction of a pro-opposition cartoonist who is still missing.
Former president Rajapakse as well as several close members of his family and associates are already under investigation for corruption as well as murder.
They have denied involvement and accused the new government of President Maithripala Sirisena of conducting a political vendetta.
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