Gwen Robinson, Sydney – The Australian government has stepped up its diplomatic involvement in the politically troubled regions of Indonesia and Papua New Guinea, following visits by top officials to East Timor and PNG in the past few days.

Alexander Downer, Australian foreign minister, yesterday said he was "more confident" about the security situation in East Timor, in southern Indonesia, after visiting the province at the weekend. Mr Downer's visit, the first to East Timor by an Australian foreign minister, followed Canberra's announcement last week of A$121m (US$79m) in aid for Indonesia to be channelled through the multilateral Consultative Group on Indonesia.

Australia's contribution to the US$5.8bn fund is the third largest, after Japan and the US. Canberra is also among the biggest contributors of personnel and aid to a United Nations police force in East Timor, which is preparing for a UN-sponsored independence ballot at the end of the month.

Last month, Mr Downer voiced concern about deteriorating security in the troubled island province and reports that paramilitary groups were operating with the tacit support of Indonesian military authorities. Hundreds have been injured and scores killed in the months since B.J. Habibie, Indonesian president, announced that the former Portuguese colony, annexed by Indonesia, would be allowed an independence vote.

Mr Downer said yesterday his visit had left him more hopeful on the security outlook. He warned, however, of "serious consequences" if Australian personnel were hurt in the lead-up to the ballot.

Mr Downer denied reports that Canberra had rejected US requests to participate in planning for an international peacekeeping force for East Timor. He said the two countries had worked "very closely" on the issue and had discussed a "wide range of contingencies".

The opposition Labor party, however, said Canberra's obvious reluctance to commit troops to East Timor was a "disgrace".

Australia had run a policy for two decades of "always giving Indonesia what it wanted and never offending it in respect of East Timor", said Laurie Brereton, Labor's foreign affairs spokesman. "Australia has consistently argued against peacekeepers in East Timor ... and behind the scenes, it's been saying to the international community it doesn't believe there should be any peacekeepers until stage three [of the transitional arrangements after the ballot]."