Reporter: Nance Haxton

Mark Colvin: The Foreign Minister Alexander Downer has strongly rebuffed criticisms and complaints from East Timor over the controversial Sunrise Gas Field negotiations.

Mr Downer was responding to comments by East Timor's Nobel prize-winning Foreign Minister, Jose Ramos Horta, last night that Australia should be more willing to compromise on its sea border boundaries.

Nance Haxton reports from Adelaide.

Nance Haxton: Negotiations between Australia and East Timor over the permanent maritime sea boundary have been moving slowly as the two sides harden their positions.

The second round of talks start in September, with millions of dollars in lucrative gas reserves on the line.

East Timor's Foreign Minister, Jose Ramos Horta, says his country has a strong case.

Jose Ramos Horta: On our side we have very, very solid legal grounds. We are supremely confident and we will be prepared to go to the International Court of Justice. We will be prepared to accept arbitration and we will honour whatever result.

Nance Haxton: East Timor is trying to put pressure on Australia by refusing to pass legislation allowing the exploitation of the multi-billion dollar Sunrise Field in the Timor Sea.

The East Timor claim is that setting the boundary at the mid point between Timor and Australia would give it ownership of the whole Sunrise project. Australia though says that its claim is based on the reach of its continental shelf.

While negotiations drag on, East Timor says it's losing a million dollars a day from resources that are in dispute and which Australia should not be exploiting. Australia's Foreign Minister, Alexander Downer, says East Timor should take a more conciliatory approach.

Alexander Downer: The vast majority of the Australian people don't appreciate the abuse that's been meted out at Australia after all we've done for East Timor, and I don't think it's a tactic that will work, and I've explained that to the East Timorese, that it's not a wise tactic.

You catch more bees with honey than you do with vinegar. Nance Haxton: Jose Ramos Horta has floated the idea of New Zealand acting as a third country mediator in the ongoing dispute.

The reason for that is that Australia in 2002 announced that it would no longer accept the jurisdiction of the International Court of Justice on border issues. That means that East Timor can only negotiate bilaterally with Australia and formal conferences on the boundary are taking place only twice a year.

However Foreign Minister Alexander Downer says bringing in New Zealand is unnecessary.

Alexander Downer: The East Timorese have made the judgment that they think a sort of high campaign of rhetoric is gonna help their cause. We just quietly have negotiations with them and don't negotiate in public.

Nance Haxton: But Mr Downer, given that Australia has renounced the jurisdiction of the International Court of Justice in this matter though, wouldn't it be appropriate for a neutral intermediary such as New Zealand to help out?

Alexander Downer: No, Australia has been a proud and independent country for a very long time, and we're able to look after our own negotiations as we did with the Papua New Guineans, as we did with the New Zealanders themselves, and we can do all of that ourselves.

Mark Colvin: Alexander Downer with Nance Haxton.