President Chandrika Kumaratunga, who shares power with Wickremesinghe, yesterday fired three ministers involved in the peace talks, suspended parliament and ordered troops out to guard key installations. Today, she armed herself with special powers over the military by signing orders for a state of emergency.

``We are fully in control of parliament, which controls all public finances and where we have secured majority support from parliamentarians,'' spokesman G.L. Peiris told reporters at the prime minister's official residence. ``These recent events will, of course, affect the course of events in the country.''

The developments, which have raised concern in Washington and New Delhi, could rekindle the two-decade-long conflict that has claimed more than 64,000 lives on the Indian Ocean island off India's southern tip, and set back an economy powered by tourism and exports of garments and tea. Sri Lankan stocks had their biggest slump on record today on fears of renewed fighting.

The Tamil Tigers last week submitted a list of demands, including administrative control of parts of the island.

Kumaratunga opposes the government's approach to peace talks with the separatist Tamil Tigers. Wickremesinghe, in Washington to brief President George W. Bush on the talks, said the actions were aimed at ``plunging the country into chaos and anarchy.

The suspension of parliament effectively scuttles the annual government budget that was to be announced on Nov. 12. The president also sacked Finance Minister K.N. Choksy, India's NDTV 24X7 television channel reported, without saying where it obtained the information.

The Colombo All Share index, fell 13 percent to 1161.388, the biggest percentage slump since the exchange opened in 1985, at the 12:30 p.m. close, according to the Colombo Stock Exchange.