Some military facilities on prime land in Sri Lanka's capital Colombo had been cleared for commercial development with two blocks already being sold to Hong Kong based Shangri Lanka and another to CATIC, a Chinese defence contractor.

A so-called 'supplementary estimate' for defence had sought authority to us the funds through selling the lands for the military headquarters project.

For 2011, 214 billion rupees was originally allocated for defence in the budget according to official data.

Harsha de Silva, a member of parliament representing Sri Lanka's main opposition United National Party had earlier said that revenue from the sale of land had not been declared in fiscal reports submitted to parliament up to last month.

The two lands were priced around 125 million US dollars each, according to official statements.

De Silva sought information when the payments were received and whether the proceeds would be credit to non tax revenues as privatization proceeds or in a different way.

He said principles of public finance would be violated if the money was spent outside the budget and if the money was not recognized as revenue.

According to finance ministry data defence spending was 190 billion rupees in 2010. Defence spending as a share of gross domestic product had fallen to 3.4 percent in 2010 from 3.9 percent in 2009, the report said.

Updated