Sri Lankan police say they are investigating an alleged attempt by a 60-year-old man to sell two children orphaned by the tsunami.

Police arrested the man on Tuesday after being tipped off about the alleged sale.

He has since been released on bail and his lawyer says he is not guilty of any crime.

Last week Sri Lanka banned the adoption of children affected by the tsunami until further notice.

The suspect was detained near the town of Balapitiya, after he apparently tried to sell the two boys for 100,000 rupees ($1,000), reports say.

"We were tipped off about the old man's intentions by a foreign couple," police officer WDT Wijesena told the Reuters news agency.

"We used them as decoys to nab him in the end."

The children are said to be in the care of the authorities.

A disaster like this brings out the best in some and unfortunately the worst in other Interpol Secretary-General Ronald K Noble

But the man's lawyer said his client was innocent.

"They were unable to produce any evidence against him and so he was released on bail," the lawyer, Sumith Dhammika de Silva, said.

Trafficking fear

The UN and international organisations have warned that child traffickers could take advantage of the situation and target children orphaned or separated from their parents after the tsunami.

"We are very concerned about the fact that there can be isolated attempts made to exploit the innocent in the wake of such a calamity," Interpol Secretary-General Ronald K Noble told Reuters.

"A disaster like this brings out the best in some and unfortunately the worst in others."

There are no statistics in Sri Lanka for the number of children orphaned by the disaster. The government says it is compiling a census.

On Tuesday, Sri Lankan officials said the country's President, Chandrika Kumaratunga, wanted to adopt a child from the minority Tamil community, orphaned by the disaster.