A Sri Lankan court Tuesday freed three Buddhist monks and 14 others suspected of torching a Muslim-owned clothing store in an attack that scaled up the country's religious tensions.

In the latest in a wave of attacks targeting minority Muslims, an angry mob of hardline Buddhists vandalised and set fire to the store in a suburb of Colombo, leading police to boost security for Muslim businesses nationwide.

"The case was dropped because the parties (police and the victim) did not want to proceed," a court official said, declining to be named, after the 17 suspects were discharged.

"The magistrate warned the monks to follow Buddha's teachings or face serious consequences," the official said.

The owner of the smashed Fashion Bug store was not immediately available for comment, but the management had previously said that they suffered extensive damage and their staff were living in fear after Thursday's attack.

Local television footage, some of it posted on YouTube, showed a Buddhist monk bringing down a store CCTV camera in front of a cheering mob outside the store, watched by at least four police constables.

Another monk is seen threatening a news cameraman who was later hospitalised after being assaulted by the mob.

Sri Lanka's main Muslim political party in the ruling coalition said the attack was a "sequel" to an ongoing hate campaign against minority Muslims.

Muslims constitute about 10 percent of the country's 20 million population, the second largest minority after the mainly Hindu ethnic Tamils. Seventy percent of the population are Sinhalese and mostly Buddhists.