The Federal Government has proposed new defence ties with Indonesia after the release on Wednesday of a new Defence white paper called for a bigger regional role for the Australian military.

The Minister for Foreign Affairs, Mr Downer, told Parliament yesterday that the two sides needed better defence ties because of shared strategic interests. "We do share a fundamental congruence of interests in the security and prosperity of our region," he said.

Australia's controversial military links with the Indonesian armed forces were downgraded last year after Australian troops led the international peacekeeping force to East Timor following Jakarta's violent withdrawal from the former Portuguese colony.

The call for a renewed military relationship came as talks began in Canberra yesterday with five visiting Indonesian ministers including the Foreign Minister, Mr Alwi Shihab.

Mr Downer said yesterday that the two sides needed to overcome remaining friction over East Timor and he echoed assurances in the white paper that Canberra supported Indonesian unity. "Indonesia's territorial integrity, which we fully support, its prosperity and respect for the rights of all its people, is central to the achievement of this objective," he said.

In Jakarta, Indonesia's military commander, Admiral Widodo, has said Indonesia did not have any problem with Australia's defence white paper that advocates the building of a new defence relationship with Jakarta. "That won't be a problem ... Australia is not an enemy or threat to Indonesia," Admiral Widodo told reporters in Jakarta on Wednesday night.

But asked about resuming defence contacts that were cut last year, Admiral Widodo said Indonesia would probably take "small steps". "We have to exercise caution on this," he said. "It is indeed our obligation to build and maintain good relations with our neighbour. But the steps to be taken must be considered and most of all realistic."

Admiral Widodo told journalists the white paper gave no clear picture of the form of the proposed defence relationship with Indonesia. He said both countries should first agree on it.

Admiral Widodo said meetings between defence officials and small teams from both countries could now take place.

[By David Lague, Lindsay Murdoch and John Schauble]