Melbourne – East Timor's first lady today accused the federal government of making the Timor Sea oil negotiations a political football.

Melbourne-born Kirsty Sword-Gusmao, the wife of East Timorese president Xanana Gusmao, was in Melbourne today to call on the Australian public to lobby for a fairer deal for East Timor in the maritime boundary negotiations.

The Australian government is currently in negotiations with the fledgling nation to divide up the estimated $30 billion in royalties from Timor Sea oil and gas deposits.

But talks between the two countries, scheduled for next month, are in doubt after the Australian government threatened to suspend them a week ago when the Labor opposition said it might have to start negotiations from scratch if it won the coming election.

"It is obviously being used a bit of a political football at the moment," she said. "I think the substantial difference in the position of the Opposition Labor Party and the current government is Labor has said that they are not interested in screwing East Timor."

She questioned the government's reaction to Opposition Leader Mark Latham's comments that if Labor won the election it would need to recommence negotiations from the beginning.

"[It] has got Alexander Downer's back up and I'm not quite sure why, because from what I can see there hasn't been any substantial progress in the negotiations anyway, so going back to the drawing board wouldn't significantly alter things."

An interim deal gives East Timor 90 per cent of government revenue from the so-called Joint Petroleum Development Area, including the Conoco Phillips-operated Bayu Undan field and part of the Woodside Petroleum-operated Sunrise project.

But East Timor has refused to ratify a second deal – the international unitisation agreement, which puts 80 per cent of Sunrise in Australian waters and the remaining 20 per cent in the joint development area.

Mrs Sword-Gusmao, said East Timor was one of the world's poorest countries, with more than 40 per cent of the population living on less than 55 US cents a day.

The former Indonesian province has been reliant on foreign aid to keep its $100 million annual budget afloat since becoming a nation in May 2002.

"I'm dismayed at the attitude of the Australian government....surely the powers that be in Canberra should say it is better for us and better for East Timor if they stand on their own two feet."