Lindsay Murdoch, Jakarta – Pro-independence Timorese leaders plan to seize millions of dollars' worth of properties in East Timor acquired by the family of disgraced former president Soeharto during Indonesia's 23-year rule of the former Portuguese colony.

The properties include part-ownership of a textile factory in the East Timorese capital of Dili, as well as hundreds of hectares of land that Timorese leaders believe were acquired illegally by several of Mr Soeharto's children, who built up a massive corporate empire throughout Indonesia while their father was in power.

Mr David Ximenes, a leading member of the National Council for Timorese Resistance, a group that expects to take a leading role in an independent East Timorese government, yesterday said from Dili that properties acquired illegally after Indonesia's 1975 invasion would be given back to the people of East Timor.

Asked about properties owned by the Soeharto family, he said: "Land such as this will almost certainly go back to the administration of an East Timor government, back to the people to whom it belongs."

The Indonesian Government led by Dr B.J. Habibie, which took power after Mr Soeharto was forced to resign amid bloodshed last May, has promised that East Timor could break away from Indonesia as early as next January if the Timorese reject an offer of widespread autonomy for the territory which the Soeharto regime annexed in 1976.

Anti-Indonesian leaders are confident the Timorese will reject the autonomy in a vote expected to be taken by August.

A former Soeharto-appointed governor of East Timor, Mr Mario Carrascalao, told the Herald that intermediaries acting for Mr Soeharto's daughter, Mrs Siti Hardijanti Rukmana, known as Tutut, cheated an old Timorese landowner when they wanted to obtain land on Dili's outskirts to build hotels in the late 1980s. Mr Carrascalao said the man, who he thinks is now dead, was given 70 million rupiah ($14,000) for the land at Comoro, but had been promised 10 times more. "I don't know whether Tutut was aware the man never got what was promised or whether the intermediaries were responsible," he said. Mr Carrascalao, who was governor at the time, said the intermediaries were members of Indonesia's security forces. Government sources in Dili say they believe Soeharto family members, including the former president's youngest son, Mr Hutomo Mandala Putra, have extensive holdings in East Timor, but most of the holdings were acquired by intermediaries and proving they were acquired illegally would be difficult.

Pro-independence leader Xanana Gusmao has said in interviews in Jakarta, where he is under house arrest, that legitimately acquired foreign-owned land would be protected in an independent East Timor. Pro-independence leaders in Dili also stressed that land properly acquired by foreigners, including Indonesians, would be protected under the laws of an independent East Timor.

Many Timorese living overseas, including Australia, own properties in East Timor. They will be given the opportunity to vote on the autonomy offer that was agreed earlier this month in United Nations-sponsored talks between Portugal and Indonesia. The Habibie Government has been under pressure to seize assets accumulated by the Soeharto family, whose fortune has been estimated to be as much as $US40 billion ($63 billion).

While a probe by the Attorney-General's office in Jakarta has so far failed to name Mr Soeharto even as a corruption suspect, authorities last week sealed off a seven-storey building owned by a company controlled by Mr Mandala Putra, claiming it was constructed illegally in a conservation zone while Mr Soeharto was in power. Mr Mandala Putra is due to stand trial on charges relating to the building next week.