The Australian Strategic Policy Institute says disaffected members of East Timor's guerilla group Falintil are forming into armed groups and pose a serious threat to security in the new nation.

At the Northern Territory University in Darwin, the Institute's Elsina Wainwright has released a study on security and defence issues relating to the new nation.

Dr Wainwright says the Australian Government should donate 30 million dollars to the East Timor Police Force over the next five years. She says efficient policing would help combat problems such as the one posed by Falintil members.

"East Timor faces the normal kind of law and order problems that any developing nation faces. But more particularly, it faces the problem of disaffected members of Falantil, former Falantil members, who haven't been selected for the East Timor defence force, and they're fairly bitter and angry about that and some of them are forming into organised armed groups."