Agence France Presse in Jakarta – Hundreds of students occupied the Parliament in Indonesia's restive province of Irian Jaya yesterday, demanding an independence referendum instead of a new autonomy package from the central Government.

A policewoman in the capital, Jayapura, said the students were staging a sit-in. The students, from Jayapura's Cenderawasih University, made speeches against the autonomy package and carried banners proclaiming "The people of Papua only want a referendum for independence," the official Antara news agency reported. The Parliament building was guarded by police.

In October, the Indonesian Government approved a bill granting Irian Jaya wide-ranging autonomy in an effort to head off independence demands. It is due to take effect on Saturday. Under the bill, the province will be known by its preferred name of Papua, allowed to fly its own flag and have an anthem.

The province, on the western half of New Guinea island, will be allowed to keep 70 to 80 per cent of revenues from its natural resources while receiving an annual six trillion rupiah from Jakarta.

The bill provides for a Papua People's Council, charged with protecting the rights of the original inhabitants. The council will have a say in the election of a governor and its representatives will be placed in Indonesian embassies abroad to promote the territory. But independence figures have rejected the bill, insisting on full independence.

The students have been protesting against the autonomy package in Jayapura in recent weeks and also demanding that pro-independence leader Theys Eluay's killers be found.

Theys was abducted and murdered after leaving a military Heroes' Day party in Jayapura on November 10. His body, showing signs of asphyxiation, was found in his car at the bottom of a ravine the next day. His driver, who had alerted Theys' family, is still missing.

Police questioned at least seven members of the special forces' unit Kopassus over the death but complain their inquiries have hit "a dead-end", according to Bambang Suharto, of the National Human Rights Commission.

Irian Jaya fell under Indonesian control in 1963 after the territory's Dutch colonisers, who named it the Dutch West New Guinea, departed in 1961.