SRI LANKA has accepted the Paris Club's offer to freeze its debt payments until the end of the year but would lobby rich countries for the moratorium to be extended through 2006 and 2007, Finance Minister Sarath Amunugama told Reuters on Friday.

The Paris Club grouping of the world's richest creditor nations offered on Thursday to freeze payments until the end of 2005 and allow deferred payments to be repaid over five years, with one year's grace.

"Of course, while we are very grateful for this decision, which will help us to tide over the immediate difficulty, and will release approximately $500 million from our regular budget ...

we would like to lobby with the G8 to extend this to even 2006 and 2007," Amunugama said in a telephone interview.

"Our reconstruction programme as accepted by the World Bank and the IMF will take a minimum of three years, ... anything from three to five years," he added.

"So we would very much like it if the Club could extend this."

Sri Lanka estimates it will cost around $1.8 billion to rebuild shattered communities and infrastructure along its southern, eastern and northern shores, where December's tsunami killed around 40,000 people.