Vakeesan Thangavel, 36, was surrounded by armed police on Monday morning after he boarded a flight bound for Geneva.
Officers allegedly shouted: “You are attempting terrorism! You have got a flag!”
Mr Thangavel had a red Tamil national flag in his baggage, which police sometimes confuse with the banned Tamil Tiger logo.
Officers hauled Mr Thangavel and a friend off the flight at 6.20am and questioned both men under the Terrorism Act 2000.
The pair were later taken to the Metropolitan Police’s counter-terrorism headquarters in Earl’s Court.
Then at 5pm dozens of police officers raided Mr Thangavel’s home and seized his laptop, USBs, documents and clothing.
The men were eventually released on bail around 11pm on Monday night.
Mr Thangavel is a member of the Tamil drumming group Parai Voice of Freedom and was travelling to Geneva to perform at a protest outside the UN Human Rights Council.
The UN summit is currently reviewing a catalogue of war crimes committed against Tamil civilians by Sri Lankan forces at the end of the country’s conflict in 2009.
Mr Thangavel told the Morning Star he was “very afraid” and “not sleeping” because of the experience.
Police have confiscated his travel documents and he fears he will now have to cancel his wedding, which is scheduled to take place abroad later this month.
His arrest comes just days after it emerged that the Sri Lankan embassy in London was actively spying on Tamil protesters.
On Friday, Westminster magistrates’ court heard evidence that the Sri Lankan military attache in London was ordered to “plan and execute appropriate strategies to counter” any protests against the Sri Lankan government.
The same official was under orders to “keep close contacts with … New Scotland Yard; Counter Terrorism Command.”
They were seized by Thames Valley Police after protesting against a visit by Sri Lanka’s Prime Minister Ranil Wickremesinghe to the Oxford Union.
One of the suspects was Sockalingam Yogalingam, an elected member of the exiled Transnational Government of Tamil Eelam, who was charged with “belonging to a proscribed organisation.”
His home was searched by seven officers from the South East Counter Terrorism Unit who seized paperwork and electronics.
He recently told the Morning Star that his case had still not been resolved.
The Metropolitan Police said enquiries into Mr Thangavel continue. He has not been charged with any offence.