Paul Mulvey, Sydney – The Whitlam and Fraser governments have been accused of lying over the deaths of five Australian-based journalists in East Timor in 1975.

Two former top level government officers told the inquest into the death of one of the journalists today that they saw an intercepted intelligence report in 1977 which indicated the men were killed in Balibo on orders from Indonesian forces.

One of the officers, Ian Cunliffe, told Glebe Coroner's Court the Australian government would have known about the report and had lied and covered it up by maintaining the men were killed in crossfire.

"I had been made privy to something which suggested the Australian government had basically been lying," Mr Cunliffe told the inquest.

His comments brought gasps from some of the Balibo Five's family members who were in court after waiting 32 years for vindication of their claims the government covered up the incident to protect its intelligence service and relationship with Indonesia.

"This is the best outcome so far," said Shirley Shackleton, widow of Channel Seven journalist Greg Shackleton. "I found it very hard not to jump up and cheer in court."

Mr Cunliffe, assistant to the secretary of the Hope Royal Commission into Intelligence and Security in the late 1970s, said he believed the intercepted document could have been seen by then-prime minister Gough Whitlam.

"I believe it would have been passed up the chain of command and drawn to the attention of ministers and, indeed, the prime minister," he said. Mr Whitlam was sacked in November 1975 and lost the subsequent election to Malcolm Fraser's Liberal coalition.

Mr Cunliffe and George Brownbill both told the inquest they believed the report came from Indonesian forces in Balibo to higher command, possibly in Jakarta, and was dated at the time the men were killed on October 16, 1975.

Mr Cunliffe and Mr Brownbill, the Hope Royal Commission secretary, told the inquest they were shown the intercepted wire by an unidentified officer at the Defence Signals Directorate at Shoal Bay in Darwin in early 1977.

Mr Brownbill told the inquest into the death of Channel Nine cameraman Brian Peters the document had three elements.

"The first was a report that as directed or in accordance with your instructions we have killed the five journalists," he said.

"The second was that it had happened at the back of a shed, or room, or behind a house.

"The third element was seeking instructions as to what was to be done with the bodies and personal effects."

Official government reports have said Mr Peters, Mr Shackleton, Gary Cunningham, Malcolm Rennie and Tony Stewart were killed in crossfire between Indonesian forces and Fretilin troops in Balibo.

But several East Timorese eyewitnesses told the inquest last week the men were executed and their bodies burnt.

Mr Brownbill believed the intercept may have been suppressed or destroyed either inadvertently or deliberately.

When asked by his counsel Alan Swanwick whether he was surprised the government would suppress or destroy intelligence, Mr Brownbill said: "That's what governments do."

While he said he was distressed the government kept the families of the five men in the dark, he was bound by the Crimes Act not to make it public.

"I was distressed by their distress, knowing that what was known by the Australian government was not known by them," he said. "But it was not my place to blow any whistles."

If the document had been made public, Mr Cunliffe said it would have alerted Indonesia to Australia's intelligence gathering, compromising the highly secretive operation and the relationship between the two countries. Mr Cunliffe also said keeping the document secret had weighed on his mind for 20 years and it was "my duty as a human being" to speak about it.

Deputy State Coroner Dorelle Pinch called for the unidentified officer at Shoal Bay to come forward and give evidence.

The Indonesian military today denied its army would have made an order to kill the journalists. "Clearly the TNI wouldn't have that kind of policy or order. It is impossible," spokesman Rear Admiral Mohamad Sunarto said in Jakarta.