Updated

A 63-year-old Sri Lankan man was arrested on charges of attempting to sell his grandchildren after their home was destroyed and their mother killed in last month's tsunami, police and local officials said Wednesday.

The man, identified as A.H. Somadasa, was taken into custody Monday at a relief camp where the extended family had been staying after the Dec. 26 tsunami, said police Inspector W.D.T. Wijesena.

On Tuesday, Somadasa was released on bail by a magistrate in the southern coastal town of Balapitiya, while the two girls, aged 7 and 9, were released to the custody of their father, Wijesena said.

The suspect's lawyer, Sumith Dhammika de Silva, insisted on his client's innocence, saying there was no evidence that Somadasa had tried to sell the girls. Instead, the grandfather told him two foreigners had come to the shelter offering to help the family but apparently had secret intentions of buying the children.

At a temporary relief camp set up inside a Buddhist temple, Somadasa's family members backed his claims, saying that two men, one English and another Indian, had visited the camp several times, asking about orphans and offering to provide aid to the family.

The men asked about Somadasa's two grandchildren after hearing their mother had died in the tsunami, and took pictures of the girls with their grandfather, said the girls' aunt, A.H. Dammi Pushpakanthi.

"They told me they wanted to come help children with no father or mother. They asked us to give them (my nieces') full names and addresses and wanted to take photos of them," she said. "They never said anything about selling the children. My father would never sell the children. He had seven girls and he never sold us."

However, Wijesena said the foreigners were the ones who tipped police off to Somadasa. Police are continuing their investigation into the case, which returns to court in a month.

The incident highlights the vulnerability of children who lost one or both parents in the tsunami, which killed about 31,000 people in this island country.

The United Nations (search) and international aid agencies have expressed major concerns that child traffickers could take advantage of the situation and try to sell orphans into forced labor or the sex trade.

"There is definitely a danger. The opportunity is there. The situation will attract (traffickers)," said Udaya de Silva, Inspector of Police in charge of crimes against women and children in the capital of Colombo.

Probation offices in southern Galle (search) district have been told to be on the lookout for such activities, he said.

Sri Lankan authorities have posted additional police and military at relief camps to ensure that abuse of vulnerable women and children does not occur, he said.