Sydney – Energy giant Woodside has warned it will scrap a multi-billion dollar oil and gas development in the Timor Sea unless East Timor ratified a controversial border treaty with Australia.

East Timor Prime Minister Mari Alkatiri has accused Prime Minister John Howard's government of bad faith towards its impoverished neigbour over the long-running dispute about maritime boundaries in the resource-rich Timor Sea.

Alkatiri says Dili will not ratify an interim deal called the International Unitisation Agreement (IUA) because it gives East Timor only 18 percent of revenues from the Greater Sunrise oil field while handing Canberra 82 percent.

"I always considered the Howard Government as a good partners but suddenly I realised that when billions of dollars are involved they became really bad partners," Alkatiri told ABC television.

Alkatiri said his parliamentary collegues would not ratify the IUA, which was signed late last year. "It doesn't make sense now ... to table the IUA [in] parliament for ratification," he said.

Woodside Petroleum, the lead company in a joint venture preparing to spend seven billion Australian dollars (5.32 billion US dollars) developing Greater Sunrise, said the IUA was needed for the project to go ahead.

"It provides us with the legal and fiscal certainty we need to proceed," a Woodside spokesman said. "Without it the development cannot proceed and will not go ahead."

Greater Sunrise is expected to generate at least 10 billion dollars in all and East Timor regards it as a lifeline that can end the nation's dependence on international aid.