Melbourne – Australia has warned that it may suspend the next round of negotiations with East Timor on a maritime border in the resource rich Timor Sea that will decide the ownership of billions of dollars worth of oil and gas.

Australia and East Timor held talks in April and are scheduled to meet again in September.

Australian Foreign Minister Alexander Downer said the next round had been undermined by opposition Labor party comments last week suggesting it would restart talks with a more favorable position toward East Timor if it won the next election.

"It could be suspended, yes. That's obviously something we'll have to consider. There won't be any point in going ahead with the negotiations if Labor is going to restart the negotiations after the election," he told the Nine Network Sunday program.

Australia's expected cliff-hanger election is tipped to be held in September or October, although it could be as late as next April, according to the Australian Electoral Commission.

Downer said there had been bipartisan support for Australia's negotiating position until last week.

"This comes at a very bad time, because these are very delicate and difficult negotiations," he said.

The dispute over the maritime boundary is threatening development of the A$6.6 billion ($4.7 billion) Greater Sunrise gas project which lies in water between the two countries.