COLOMBO, Jan 25 (Reuters) - A power struggle between Sri Lanka's president and prime minister threatens aid flows to the island, but donors are still committed to backing a peace process with their money, Japan said on Sunday.

Japanese special envoy Yasushi Akashi said despite a breakdown in peace talks and political fight between President Chandrika Kumaratunga and Prime Minister Ranil Wickremesinghe, the peace process was still strong because a ceasefire was holding.

Donors who pledged $4.5 billion at an aid conference in Tokyo last June -- conditional on progress in the peace process with the Liberation Tigers of Tamil Eelam (LTTE) -- want humanitarian aid to continue, Akashi said.

"All of us are anxious that humanitarian and rehabilitational assistance should continue to reach the north and east, particularly with the view to making the people enjoy the dividends of peace," he said.

The north and east were the worst-hit in the two-decade war, and the rebels have complained that not enough has been done to rebuild their areas since a Norwegian-brokered truce was signed two years ago.

Akashi was in Colombo to chair a follow-up meeting to the Tokyo conference of about a dozen donor countries plus the International Monetary Fund and other international bodies.

"The donor community expressed deep concern over the events, and hoped that the political deadlock surrounding the president and prime minister should be resolved harmoniously as soon as possible," he said.

"I think there is a perception that the LTTE is not responsible for the present political deadlock in Colombo. Why should it be punished by it?" Akashi said.

Kumaratunga and Wickremesinghe have locked horns over how to permanently end the 20-year war that has killed 64,000 people, with the president seizing control of three ministries, including defence, in November.

She accused Wickremesinghe, whose party controls parliament, of endangering the security of the country by giving away too much to the rebels.

He denies that and has refused to have anything to do with the peace process until the president hands back the ministries.

The talks broke down last April when the Tigers walked away, complaining not enough was being done on the aid front.

Akashi said donors were worried about continued recruitment of children by the rebels -- which the LTTE denies -- and other human rights issues.

He also said figures on aid disbursement would be released in several weeks.