Kerry O'Brien: First, the Timor papers, released today, which finally confirm after a quarter of a century of suspicion that Australia was warned in advance of Indonesia's brutal invasion of East Timor in 1975 and condoned it. The hundreds of Foreign Affairs documents reveal a private relationship of great closeness and candour between Indonesia's Suharto regime and Australia's Whitlam Government leading up to the invasion in October '75.

It shows effective Australian support and even encouragement in advance for Indonesia to absorb East Timor. It also reveals that Australia had three days notice advance of the time and place of the Indonesian attack in which five Australian newsmen were killed at Balibo. Up to 200,000 East Timorese are estimated to have died during the 25 years of Indonesian occupation that followed.

Political editor Tim Lester reports on the new evidence of Australia's part in the East Timor tragedy.

Tim Lester: A mission driven by a sense of good, by outrage at atrocities against innocent people. Yes, but there was a sense of guilt as well.

When it led last year's operation to restore peace and allow independence in East Timor, Australia went in as a nation with a chequered record here. A generation earlier, it had been given prior knowledge of an Indonesian invasion and occupation, only then coming to an end. Documents released today, suggest far from trying to stop it, Australia encouraged it. James Dunn, former Australian consul to East Timor: As many as 20,000 people died. Now, of course, many of them, most probably, from disease or starvation.

Tim Lester: This afternoon, former Australian consul in Dili James Dunn began ploughing through almost 500 key Foreign Affairs documents on what was called Portuguese Timor in the mid-70s. In 1974, he recommended Parliament support self-determination for East Timor, arguing its people would never willingly join Indonesia.

James Dunn: Not because the Timorese hated the Indonesians, they just had a different historical experience.

Tim Lester: It wasn't going to happen?

James Dunn: It wasn't going to happen. It wouldn't have been contemplated by them.

Tim Lester: But was by Indonesia. Jakarta wanted to swallow the half island territory with Australia's blessing. The Foreign Affairs documents suggest the Indonesians outflanked Australian diplomats and ministers to get that blessing.

Hamish Mcdonald, 'Sydney Morning Herald': It was enthralling. I really sat up all night at one stage reading it, I just couldn't put this down.

Tim Lester: Journalist and author on East Timor Hamish McDonald says the documents show Indonesia compromised Australia by briefing our Jakarta-based diplomats on Indonesian plans beginning almost a year and a half before the attack.

July 1974, a departmental letter headed "Top Secret – Indonesian Clandestine Operation in Portuguese Timor" details recommendations to President Suharto of an operation to ensure that the territory would opt for incorporation into Indonesia.

Hamish McDonald: I think they were testing us to see what we would accept and the fact is we didn't protest at it. Except for some minor tut-tuts and be carefuls.

Tim Lester: So the briefings continued. 2.5 weeks before Indonesia's fateful attack on Balibo, Australia's Jakarta embassy tells Canberra there's to be a significant escalation of Indonesian involvement in Portuguese Timor, involving 3,800 Indonesian soldiers.

Three days before what was effectively Indonesia's invasion, the Australians have even a broad battle plan. The main thrust of the operation would begin late on 15 October, it would be through Balibo, Maliana and Atsbae. That's right, Balibo.

The Timorese town etched in Australian history as a murder site for five Australian newsmen. Now we know their Government knew three days beforehand that Balibo was in the eye of the storm.

Hamish McDonald: From the following night, Tuesday the 14th, Greg Shackleton's reports from the border were being broadcast on Channel Seven stations here in Canberra and in Melbourne. I find it disgraceful that no-one put what they must have seen on the TV screens together with what they were reading and didn't come up with the thought that these guys were right in the path of danger.

Shirley Shackleton: It wouldn't be very hard to imagine that a group of blood hungry warmongers coming over the border finding five people in a town that's deserted, they would be in a certain amount of danger, especially since a great deal of secrecy surrounded these crossings.

Tim Lester: For 25 years, she's looked for answers on the death of husband and Seven news reporter, Greg Shackleton.

James Dunn: A terrible mistake. I think the worst, perhaps the worst failure in the history of Australian diplomacy because of its consequences. The five newsmen in Balibo, they were the first casualties. But in a sense they were the tip of the iceberg. Even that incident showed the Indonesian military they were on track and they could get away with it because no formal protest was ever lodged with Indonesia.

Richard Woolcott, former Australian ambassador to Jakarta: The Australian Embassy had no knowledge that there was any Australian journalists or any Australians in the Balibo area at that time.

Tim Lester: Currently travelling in Hong Kong, Richard Woolcott was Australia's ambassador in Jakarta at the time. If the embassy didn't have prior knowledge that the newsmen were in deep trouble, there have since been claims Australian intelligence did, having monitored the Indonesian military, at least inferring they'd killed the journalists thought to be at Balibo.

Hamish McDonald: We have got accounts from a number of senior and well placed former intelligence officials who cited this document and there are clues to its existence in the second Sherman report, which have not been followed up.

Alexander Downer, Foreign Affairs Minister: People can make their own judgments about whether there was a completely different story in the intelligence, but all I can say to you is that that's hardly likely to the case, is it? Because if intelligence was telling the Australian departments at that time a certain story, that would be reflected in the documents that were produced and of course it is.

Shirley Shackleton: Well, if they say they're going to release all the documents, they should release all the documents and not withhold some of them because you know, even an incurious person would say, "What are they holding back, what's in there?" I can't imagine what's in there. But it must be something pretty shocking.

Tim Lester: But the revelations from these documents, in particular the fact that Australia was briefed all the way by Indonesia, is now having an impact on the key figures from that time. For example, Malcolm Fraser.

When was he told that Indonesia had fed Australia its pre-invasion plans? As Opposition Leader or only when he became PM? No. He says he was briefed today by the first journalist to call him.

Tim Lester: Were you as Opposition Leader briefed on the prior warning that Australia was given?

Malcolm Fraser, PM, 1975-1983: No, I wasn't.

Tim Lester: Were you then briefed when you came as caretaker PM on the fact that Australia had been prewarned?

Malcolm Fraser: It's 25 years ago and there's that caveat on it. But I very strongly believe I would have remembered such a material fact. I do not believe I was briefed. I believe it was a very serious omission.

Richard Woolcott: Officials do not make policy, they advise. Governments make policy and certainly strong prime ministers like Whitlam and Fraser, who were the prime ministers during the period covered by the documents, they're not the sort of people who take uncritically the views of officials. Officials advise, governments decide.

Tim Lester: Not in this case, at least not according to Malcolm Fraser. The former PM says a message he authorised reassuring President Suharto on the East Timor question, and now published, would never have been sent had he known the cosy diplomatic relationship with Jakarta.

Malcolm Fraser: There was great pressure, I think deriving from the ambassador, for a message to be sent.

Tim Lester: Had you been properly briefed as caretaker PM on that prior warning, might it ultimately have changed the Fraser Government's long-term policy on the question of Indonesia and East Timor's integration?

Malcolm Fraser: That's a real possibility.

Richard Woolcott: I think the embassy did a very professional job in what it was supposed to do. It provided the Government with the information it needed on which to base its policy decisions and the idea that because we did our job so well that we might have been in some way complicit I think is nonsense. Australia couldn't possibly have stopped Indonesia from incorporating East Timor once a cabinet decision had been taken to do that in Indonesia.

Tim Lester: The full irony of East Timor for Australia came with the events of last year. Virtually everything our diplomats and government ministers had struggled to avoid a generation earlier came to pass anyway. Australian troops in the territory, bloodshed, relations with Indonesia soured – in that sense, events in East Timor ultimately confirmed the failure of Australia's handling of Indonesia in the mid-'70s.

Kerry O'Brien: We approached former PM Gough Whitlam, his foreign minister, former senator Don Willessee, and former defence minister Bill Morrison for this story. All declined to be interviewed. Labor's current Shadow spokesman, Laurie Brereton, was unavailable for comment.