Community and business leaders on the Indonesian island of Bali have asked their local parliament to seek greater autonomy within Indonesia.

The Indonesian Observer newspaper said the proposal, citing Bali's religion and its status as a tourist magnet, was made at a meeting of the leaders of the local parliament's representative faction.

Some leaders also suggested that Bali could stay within the legal Indonesian definition of autonomy if it introduced special courts to conform with the local Hindu customs.

Others argued for a fairer distribution of profits from the lucrative tourist trade, most of which ended up in Jakarta.

Officials of the Bali branch of the Indonesian Restaurant and Hotels Association said the island received only 8 per cent of the annual tourist-generated income of $28 billion.