By Roland Buerk
BBC News, Colombo
The ceasefire between Sri Lanka's government and the Tamil Tigers formally comes to an end on Wednesday.
Heavy fighting has been going on in the north and east
The government gave notice two weeks ago it was pulling out of the agreement which was brokered by Norway in 2002.
Fighting has been going on in the north and east of the island for around two years despite the truce.
Tamil Tiger rebels said on Thursday they were "shocked and disappointed" that the ceasefire was ending, but pledged fully to defend themselves.
As the ceasefire came to an end fighting continued along the frontlines that surround territory held by the Tamil Tigers in northern Sri Lanka.
The government says the rebels, who want an independent state in the north and east, used the peace pact signed in 2002 to rearm and regroup. It now aims to crush them by the end of this year.
But speaking from the north the head of the Tigers' political wing B Nadesan said they would fight back.
"For last 30 years they are making these type of statements but it will never happen," he said.
"We are in a strong position, our cadres... have the strength to defend this military offensive.
"Definitely if they try to launch a major offensive against our forces the Sri Lankan forces will face severe casualties."
The government now says it will produce within weeks a long delayed package of devolution proposals.
It is seeking to sideline the separatist Tigers and resolve with other groups the complaints of the Tamil minority that they have been marginalised for decades by Sinhalese-dominated governments.
But there are serious doubts over whether the scheme can work.
As the last hours of the ceasefire ticked away the Japanese peace envoy, Yasushi Akashi, held meetings with government officials in Colombo.
Japan is a major donor to Sri Lanka and has hinted it might reconsider its aid package, warning of the dire humanitarian consequences of an intensified war.