Nigel Wilson – The East Timor parliament has ratified the Timor Sea Treaty with Australia, further embarrassing the Howard Government.

The office of Prime Minister Mari Alkatiri confirmed last night that parliament had voted 65 to 13 to approve the treaty on the administration of petroleum reserves between Darwin and Dili.

Gas discoveries covered by the treaty will be East Timor's main source of revenue, with the country's potential earnings estimated at up to $US40 billion over the next 30 years.

The document was signed by Prime Minister John Howard and East Timor President Xanana Gusmao in Dili, on the country's foundation day on May 20, with the understanding it would be ratified by December 31.

But Foreign Minister Alexander Downer last week reneged on that understanding by refusing to introduce the treaty in time for it to be debated before the parliament rose for the year. It will now not be introduced until February.

Australian officials have angered the East Timor Government by insisting an agreement covering the terms for development of the Sunrise gas reservoirs about 450km northwest of Darwin should be concluded before the treaty was ratified.

East Timor has been accused by some Australian officials and company representatives of holding up the treaty's ratification to secure better terms from the Sunrise negotiations.

The suggestion has infuriated East Timor, with Dr Alkatiri insisting his parliament would ratify the treaty inside the agreed timetable.

He said Australia's decision to withdraw from the UN laws of the sea convention on maritime bound aries ahead of the Timor treaty being signed was an unfriendly act.

In Darwin yesterday, talks on the Sunrise deal appeared to have made progress, with negotiations to continue until at least tomorrow.