Dennis Shanahan, Batam – Australia and Indonesia are expected to take a giant leap forward in restoring relations today with a statement of common principles and an accelerated timetable for the signing of a defence pact.

But as John Howard set out the topics to be discussed today with President Susilo Bambang Yudhoyono, it emerged last night that Jakarta decided to go ahead with the talks only on Friday.

The Prime Minister will meet Dr Yudhoyono, on the Indonesian island of Batam, for the first time since relations hit a seven-year low when Australia granted asylum to 42 Papuan boatpeople in March.

Relations were strained again when Liberal senators and MPs headed off amendments to the immigration detention system, which had been intended to pacify Indonesia over Papuans seeking refuge in Australia.

Tensions increased further with the early release from prison of Abu Bakar Bashir, the spiritual leader of the Jemaah Islamiah terror group, which was responsible for the Bali bombings.

Speaking before his departure for Batam yesterday, Mr Howard said the Australian-Indonesian relationship was "challenging" but "good", and he moved to ease Indonesian concerns about the Papua issue. "We don't support separatist or secessionist movements in Indonesia and we have no wish to see Australia used in any way as a staging post for those movements or activities," he said.

"Our attitude towards Papua is very simple. We support Indonesian sovereignty over Papua, we always have since the 1960s."

The federal Government hopes there will be an agreement on the common principles shared by Australia and Indonesia, with specific reference to terrorism, people-smuggling and aid following the 2004 tsunami and the recent earthquake in Yogyakarta.

Some formal and blunt recognition of Indonesia's sovereignty over Papua is also expected.

Mr Howard will raise the issue of the early release of Bashir with the Indonesian President, and give an account of what Australia believes is happening in the former Indonesian province of East Timor.

It is possible progress will be made with a proposed security pact between Australia and Indonesia, but it will not be signed during the meeting. "The suggestion that a security pact would come out of these discussions is not one that came from me, or from the Australian side," Mr Howard said.

Bashir attempted to inflame passions further yesterday by criticising Australia and thanking the Indonesian Government for his early release after serving time for terrorist offences.

Mr Howard said he would be raising the cleric's treatment with the President. He wrote a terse note to Dr Yudhoyono after Bashir's release, which expressed the concern of the Australian Government and spoke of the public resentment over the issue.

Labor foreign affairs spokesman Kevin Rudd said yesterday Mr Howard should ask Dr Yudhoyono for Bashir to be put under 24-hour surveillance, "and that if there is any outbreak of anti-Australian sentiment" in his schools they should be closed.