Indonesia wants to resolve the East Timor problem rapidly because it had proved costly both economically and politically, Finance Minister Ginandjar Kartasasmita said at the weekend.

His comments came as two prominent Indonesian opposition leaders declared they were opposed to independence for the disputed territory and coincided with the arrival of the first Portuguese diplomat in Jakarta since Indonesia unilaterally annexed East Timor 23 years ago.

Last week in a surprising policy reversal, Indonesia said it might grant independence to the troubled territory, ending two decades of quasi-military rule if a majority of the people there reject the autonomy offer.

East Timor was "very, very expensive not only in terms of money and materials" but also politically because it has meant Indonesia has been "harassed, patronised morally" in the international community, Mr Ginandjar said at the World Economic Forum in Switzerland.

Indonesia's wish to resolve the problem, he said, was that "we want to turn a new leaf, it is part of the reforms. We are really serious when we say we are on our way to becoming the third-largest democracy in the world".

Indonesian Democratic Party leader Megawati Sukarnoputri said President B.J. Habibie had no authority to make a decision on East Timor because his Government was not democratically elected.

"East Timor's integration into Indonesia is constitutionally and politically legal because it was a manifestation of the wish of the East Timorese accommodated by the (Indonesian) House of Representatives," she said. Ms Megawati said she feared that relinquishing East Timor could result in war and disputes among the East Timorese.

Abdurrahman "Gus Dur" Wahid, the chairman of the 40-million strong Nahdlatul Ulama Muslim organisation and strong backer of the popular and newly founded National Awakening Party, said Indonesia had decided to include the troubled territory as part of the nation. "That (decision) must be respected," Mr Wahid was quoted by Kompas as saying. "In my opinion, East Timor should remain part of Indonesia."

Mr Ginandjar acknowledged at the economic meeting that the political situation in Indonesia was hampering the restoration of international investor confidence in the country, but said the June election would address that problem and after that "I am quite sure we are going to restore confidence".

Indonesia would see negative growth this year, but should return to positive growth in the second half, providing elections go well and this should lead to stronger growth next year, Mr Ginandjar said. But for 1999 as a whole he expected nothing better than zero growth.