COLOMBO, Sri Lanka - At the height of his power, the Tamil commander ran a shadow state. His guerrilla force, backed by artillery, a navy and a tiny air force, reportedly took in hundreds of millions from donations and smuggling.

Now he is hiding in a jungle. Or he has fled to Malaysia. Or maybe he is dead.

With his rebel separatist group on the brink of defeat at the hands of the Sri Lankan military, Velupillai Prabhakaran's fate remains a mystery. But then, he has lived most of his life in the shadows.

What happens to Prabhakaran could be crucial to the future of the ethnic Tamil rebel group he founded. The Liberation Tigers of Tamil Eelam is so centralized that without a leader it would almost certainly spin into disarray and the war would come to a swift close.

One western diplomat said that if Prabhakaran were to flee, it would be viewed as cowardice by his followers. But the diplomat, who declined to be named because he is not authorized by his government to speak on record, said the rebel leader's death in battle or by suicide would make him a martyr to inspire future generations.

Over the past three decades, Prabhakaran has turned a small band of barely armed separatists from the Tamil minority into one of the world's most feared guerrilla groups.

The United States and India have branded the chubby 54-year-old guerrilla leader a ruthless terrorist and accuse him of running a death cult. The Tamil Tigers have been blamed in scores of suicide bombings and the assassinations of former Indian Prime Minister Rajiv Gandhi and Sri Lankan President Ranasinghe Premadasa.

Prabhakaran once commanded a de facto state across much of northern Sri Lanka and parts of the east, complete with its own tax system, police force and courts. His guerrilla force reportedly earned up to US$300 million a year from expatriates and its extensive arms and drug smuggling operations.

But in recent months, the government overran his administrative capital at Kilinochchi, captured much of the rebel-held territory and trapped his fighters - and an estimated 250,000 civilians - in a small area in the northern jungles.

On Monday, the army announced it had captured Prabhakaran's main hideout - a two-storey, air-conditioned bunker 15 metres underground.

Photos posted on a government website showed a dark, spartan enclosure with narrow, whitewashed hallways, white tiled floors, and furnished with a refrigerator, cabinet, portable cooking stove, single bed and cane chairs. A painting of three tigers decorated one wall.

It was equipped with surveillance cameras, generators, satellite dishes and insulin apparently for use by the diabetic rebel leader, the military said.

Defence Secretary Gotabhaya Rajapaksa said Prabhakaran was almost certainly in the jungle area still under rebel control - probably in a bunker near the small town of Puthukkudiyiruppu.

But last month, army chief Lt.-Gen. Sarath Fonseka said Prabhakaran may have fled to South Africa. And police were reportedly on the lookout for him in Malaysia.

There has also been media speculation that Prabhakaran might have been injured or even killed.

In an interview with Australia's Special Broadcasting Service radio, a rebel leader who identified himself as Thileepan denied Prabakharan had fled.

"That is ridiculous. No, he is with us ... He is with the people," he said, with the sound of artillery fire booming in the background.

For years Prabhakaran was a shadowy presence. He reportedly destroyed all photos of himself, leaving police referring to an outdated school picture in their hunt for him.

Pictures have recently surfaced on the Internet of the mustachioed leader meeting with commandos before suicide missions or laying wreaths at the funerals of fighters. He held a rare news conference in 2002, but went underground when a ceasefire officially broke down three years ago.

Prabhakaran grew up on the Jaffna peninsula, the Tamil minority's cultural heartland, amid seething discontent with the government. Many Tamils felt their culture and rights had been marginalized by a succession of governments dominated by the Sinhalese majority.

He rose to prominence after killing the mayor of Jaffna in 1975 and used his new militant credentials to create the Liberation Tigers of Tamil Eelam.

The militants waged increasingly brazen attacks against the government in the north, capped by a 1983 ambush that killed 13 soldiers and sparked anti-Tamil riots in Colombo that left an estimated 2,000 people dead.

That violence attracted many Tamils to his call for a separate state, and rebel recruitment shot up.

His top fighters were given cyanide to swallow in case of capture, ordered to abstain from sex and cut all personal ties so they can dedicate themselves to the fight.

Prabhakaran, who is married with three children, has largely orchestrated the violence from fortified underground bunkers rather than the front lines. He consolidated power by killing rivals and tolerating no dissent.

"I am like a spider at the centre of the web," he told Indian journalist Anita Pratap in 1990.

He reportedly agreed to a peace accord signed by India and Sri Lanka in the late 1980s, but when Indian peacekeepers arrived, the rebels attacked and drove them out. In 1991, a female suicide bomber reportedly sent by Prabakharan killed Gandhi at an election rally in India.

Though the rebels joined in several rounds of peace talks, the government was never willing to accede to Prabakharan's demand for a separate nation.

Prabhakaran said he could not accept anything less.

"Thousands of my boys have laid down their lives for Eelam," he told Pratap. "Their death cannot be in vain."

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