Sri Lanka has issued a thinly-veiled threat to pull out of the World Cup or field a second-string team as Sanath Jayasuriya's men refused to compromise on a pay demand.

The Board of Control for Cricket in Sri Lanka said its offer of performance-based payments at the World Cup starting next month had been turned down by the national squad.

The BCCSL was itself in a crisis with the International Cricket Council which had set a January 17 deadline for Sri Lankan players to sign contracts to play at the tournament.

"In the event that the squad members fail to do so the BCCSL will be reluctantly compelled to avail itself of all remedies available to it," the board said in a two-page statement.

A top cricket board source said the options included fielding a different squad or completely pulling out as Jayasuriya's men were making totally unacceptable demands.

The players were insisting on a 20 per cent share of the BCCSL's guaranteed fee of $US6.4 million ($A10.95 million) dollars from the World Cup, but the authorities were only willing to offer 10 per cent plus an incentive payment.

The incentive was a $US100,000 ($A171,086) bonus to the entire team if they won the World Cup, taking place in Africa from February 9 to March 23, plus the doubling of match fees from $US700 ($A1,197) to $US1,400 ($A2,395).

An additional $US20,000 ($A34,217) was also being offered if the team entered the finals.

The BCCSL said it had paid 70 per cent of its total revenue last year to its players and argued that the new pay demand would leave the board without adequate cash for promoting the game in rural areas of the island.

BCCSL chief executive Anura Thennakoon said he did not see a way out of the match fee crisis, but said the players must have the matter resolved "in a day or two."

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