Alison Roberts,Lisbon – East Timor's President Xanana Gusmao has launched a fierce attack on Australia's attitude in its dealings with the fledgling country.

Mr Gusmao said there was an unequal struggle with Australia to secure oil and gas resources.

In a speech in Lisbon, he said that battle was only comparable to the Timorese fight to free themselves from Indonesian domination.

East Timor won independence and became the world's newest country in 2002. But its relations with Australia are already complex.

Resentment

Australia sent many of the peacekeepers who helped smooth the territory's transition to independence and its development will depend on economic ties with its larger neighbour.

But a dispute over oil and gas resources in the sea between them is souring relations.

There has long been resentment on the part of the Timorese that Australia in 1989 secured significant concessions from Indonesia after recognising its sovereignty over the territory.

This week, a first round of talks on the issue ended with little progress made.

East Timor insists the boundary should be midway between the countries while Australia says the line should follow its own far-reaching continental shelf.

Talks are to restart in September but Australia has begun exploiting several disputed fields.

On Thursday during an official visit for the 30th anniversary of the Portuguese revolution, Mr Gusmao accused Australia of usurping his country's resources.

Mr Gusmao has already warned that his country, one of the world's poorest, could become a failed state like Haiti if Australia achieves its goals.

In East Timor, feelings are running high, with hundreds protesting outside the Australian embassy in recent days.