The United States embassy in Sri Lanka denied on Saturday it was "pumping money" into the country to topple President Mahinda Rajapakse after the allegations were levelled by a minster.

Resettlement minister Gunaratne Weerakoon accused US envoy Michele Sison of seeking to fund opposition forces in the election campaign in order to oust Rajapakse who is seeking an unprecedented third term in next month's elections.

"She is pumping money to topple President Mahinda Rajapakse," the minister told an election campaign rally Friday.

The US embassy strongly rejected the minister's accusations.

"The allegations by Minister Gunaratne Weerakoon are baseless," the embassy said in a statement.

"They reflect a fundamental misunderstanding of our engagement with senior government officials and our policy towards Sri Lanka as well as the US political and economic system."

The minister also alleged that Sison had offered him "a five-year scholarship for my children (and) a house in the US and a green card" if he agreed to a demand to remove military camps in the island's former war zone.

Dismantling the camps has been a longstanding demand of US and other Western nations, as well as of neighbouring India, which have criticised Colombo's human rights record.

"I said closing army camps is not something I can do, but it is up to the president," Weerakoon said.

Sison left Sri Lanka Saturday after completing her term as ambassador.

Prior to her departure, she met with President Rajapakse and Foreign Minister G. L. Peiris who had "congratulated her on strengthening bilateral ties", the statement added.

Relations between Washington and Colombo soured after the United States secured a UN-led investigation into the final stages of Sri Lanka's separatist war that came to an end in May 2009.

Sison had strongly articulated Washington's displeasure over Sri Lanka's failure to address allegations that up to 40,000 civilians were killed by troops in the final months of the ethnic war.