Geoffrey Barker, Bali – "We have crossed the Rubicon. We are relaxed ... We have put every card on the table. There has been a sea change in the Indonesian position. We are not afraid."

Mr Ali Alatas, the veteran Indonesian Foreign Minister, wants Australians to understand that Jakarta is prepared to give East Timor whatever it wants to resolve as quickly as possible the problem of the former Portuguese colony which, he said, was "thrown into our lap".

If the East Timorese opt for autonomy within the Indonesian republic, "that will be fine with us"; if they choose independence, that too will be fine with Jakarta.

For almost an hour on Wednesday night Mr Alatas answered questions on East Timor from Australian journalists attending the Australia-Indonesia joint ministerial meeting. His performance was a tour de force of diplomatic persuasion, sometimes impassioned, sometimes cool, always controlled, never dull.

Despite advancing age and a perception the end of his long diplomatic career may be in sight, Mr Alatas is a class act in front of cameras in his black, yellow and white batik shirt. He listens intently and gives detailed answers without evasions.

He said it was too soon to reveal how Indonesia would ascertain the wishes of the East Timorese, although he insisted that Indonesia still opposed a referendum on East Timor.

Mr Alatas left no doubt that Indonesia's $US100 million a year financial support for East Timor would cease immediately if the province opted for independence – a message leaving no doubt that Australia and other willing countries would face a substantial aid bill for an independent East Timor.

"The minute that separation happens, East Timor will become Portugal's baby again and the UN's," he said. "We will pay for our own army to be withdrawn; we will pay for our regional government to be withdrawn. But if they decide the time has come for the parting of the ways, then East Timor reverts to its original position as a non-self-governing territory under the UN with Portugal as its administering power.

"Don't ask us how that's going to be funded because it's not our business any more. Right? I mean, let's think clearly and logically: it's not our business any more to be held responsible."

Mr Alatas said Indonesia was offering East Timor the best of both worlds: a high degree of autonomy and freedom within a major nation. If it wanted to be a small and weak independent country, that was its business.

Mr Alatas conceded that Indonesia had made mistakes during the past 24 years in East Timor, the worst being the 1991 Dili massacre. "But we also put a lot of development money in there," he said.

Mr Alatas said Indonesia was concerned at the possibility of violent civil strife in East Timor if it opted for independence. "If there is one country vitally interested in East Timor not relapsing back into violence, it is our country – even more than Australia," he said.

But Mr Alatas added that in East Timor "memories are very long ... there is a lot of vengeance and the vengeance runs deep". He said achieving reconciliation would be "a very difficult process in East Timor".