The Government has quietly resumed military ties with Indonesia, brushing aside concerns over human rights abuses.

The decision was made in December amid concern that limits on the defence relationship were hampering co-operation in the war on terror and fighting trans-national crime.

The re-engagement has occurred despite the fact that no Indonesian officer has yet been punished for the violence in East Timor that precipitated the suspension. New Zealand cut cooperation in September 1999 in protest against the actions of the Indonesian armed forces in the former Portuguese colony as it voted for independence.

Defence Minister Phil Goff told The Press that the suspension was lifted three months ago "to allow limited defence re-engagement".

The move allows an Indonesian officer to attend the New Zealand Defence Force staff college for six months this year. It also allows a group of New Zealand officers to tour Indonesia.

Goff said the re-engagement was a recognition of "some quite marked changes" in Indonesia since the bloodshed of 1999 and within Jakarta's military forces.

"The TNI, the defence force, has undergone significant change and reform," he said. "When you see clear changes – maybe not perfection, but meaningful changes in the right direction – then you signal your approval and welcoming of that by some movement on your side."

Goff said the 2004 Boxing Day tsunami relief effort that saw New Zealand troops working alongside their Indonesian counterparts in Indonesia's Aceh province had helped to improve ties.

The wave's destruction had forced Jakarta and separatist rebels there to the negotiating table, effectively ending a long and bloody civil war.

Indonesia now had its first democratically elected president, who had said reform of the military was a priority, Goff said. "We have seen real progress in terms of respect for human rights," he said.

The Indonesian Human Rights Committee said it was shocked by restoration of military ties, calling it "disgusting".

It accused the Government of making no formal announcement and ignoring human rights violations in Papua and Poso. It also noted that no Indonesian military officers and only one militia leader had been held to account for the mayhem in East Timor.

The United States-based Human Rights Watch lobby group has also been strongly critical of Indonesia in its latest report on the country.

Goff denied the Government had tried to re-engage quietly, noting a one-line mention of the invitation to an Indonesian military officer in a speech by Foreign Minister Winston Peters in December.

"I was overseas at the time of Winston's speech and wasn't able to do a formal press statement," Goff said. He said other countries, including the US, Sweden, Australia and Britain, had already re-established ties.

"There are areas where increasingly we need to work with Indonesia, including counter-terrorism, people-smuggling and trans-national crime," he said.