Craig Skehan – East Timor will receive $7 billion over 20 years under a historic agreement with Australia on the sharing of oil and gas revenues from fields in the Timor Sea.

"It will make the difference between being mired in poverty and having a chance to provide a better life for the people," East Timor's chief negotiator, Mr Peter Galbraith, said last night.

The deal had just been approved by East Timor's transitional Cabinet at the end of months of highly sensitive, and at times controversial, negotiations. There were shrill warnings by the Northern Territory Chief Minister, Mr Burke, and his senior ministers, that huge resource developments were in serious jeopardy.

There was also highly personal attacks on Mr Galbraith. "They don't have much experience of these types of negotiations, so one can excuse them," Mr Galbraith said last night.

As well as receiving 90 per cent of royalties from a joint development area, East Timor will get extra financial help from the Australian Government to develop local downstream petroleum-based enterprises.

The dark cloud over the talks started to lift several weeks ago with agreement by East Timor to defer claims for a new seabed border with Australia. In what many saw as an ambit claim, East Timor had sought control of areas currently solely exploited by Australia.

Mr Galbraith and senior East Timorese leaders were in Canberra last week for talks with Australia's representatives, including the Foreign Minister, Mr Downer, and the Resources Minister, Senator Minchin.

Mr Downer and Senator Minchin plan to fly to Darwin today and on to East Timor's capital, Dili, tomorrow for the signing of what was dubbed the Timor Sea Arrangement.

The signing ceremony will be a different affair from the signing of the Timor Gap Treaty covering oil and gas projects between former Labor foreign minister Mr Gareth Evans and his then-Indonesian counterpart, Mr Ali Alatas, in 1989.

They toasted with champagne in a jet high over the Timor Sea. However, most East Timorese regarded it as bitter betrayal by Australia of their interests. East Timorese were still under brutal Indonesian rule which ended with the 1999 United Nations-supervised vote on self-determination.

Mr Downer said the Howard Government had always wanted to provide an independent East Timor with "a long-term revenue flow to support its development".

"Given East Timor's recent history, this is an objective that is shared by all Australians."