Aiyathurai Mohandas alias Adavan Master is believed to be the main suspect in the finding of a suicide jacket and arms and explosives cache from a house at Chavakachcheeri, said the TID.
The TID has raided his Jaffna house, but he had fled by that time.
The intelligence leader for Mannar and the Wanni during the war, the man surrendered to the military in 2009.
After undergoing rehabilitation for one-and-a-half months, he had been given to the custody of the Army intelligence.
Twenty LTTEers, including several leaders, are under arrest in connection with the Chavachcheri finding, police headquarters sources say.