IN their testy negotiations over oil and gas reserves in the Timor Sea, the Australian and East Timorese sides have been driven solely by their respective national interests. This is good and proper. If Australia wants to provide assistance to East Timor, it should do so through the transparent mechanism of aid, not by giving way on maritime boundaries and ceding bits of Australia. And indeed, Australia has kicked in $235 million in aid to the poor and fledgling nation since it wrested its independence from Indonesia in 1999.

But that sum is dwarfed by the billions of dollars worth of oil and gas believed to be buried under the shallow Timor Sea, between the two countries. An agreement nutted out last year on the $6 billion Bayu-Undan gas field, 500km northwest of Darwin, recognised the predicament of East Timor with a 90:10 revenue-sharing deal in East Timor's favour, within a Joint Petroleum Development Area. The sticking point is the even more lucrative adjacent Greater Sunrise field. Under the maritime boundary claimed by Australia, which is based on geological features, only the 20 per cent of Greater Sunrise that lies within the JPDA benefits East Timor.

The East Timorese want a boundary based on a median line before they will ratify the fiscal and legal arrangements for Greater Sunrise. Australia refuses to be rushed on the boundary talks and, unless one side caves by year's end, investors will take flight.

All this particular china shop needed was a bull, and it has arrived in the shape of Opposition Leader Mark Latham. In one of those thought bubbles that seem to drive his approach to international relations, Mr Latham has floated the idea that under a Labor government, all negotiations including those the East Timorese have signed off on would be reopened.

This has handed Foreign Minister Alexander Downer twin opportunities: he can now politicise the negotiations, using them as a wedge against Labor; and he can put the boundary talks on hold, upping the heat on East Timor.

Mr Latham has shown a tendency to tack to the Right on social policy and throw the Left an occasional sop on foreign affairs. By destabilising the East Timor talks, he has unintentionally mimicked his hero, former US president Richard Nixon, who cruelled the Johnson administration's peace talks in 1968 by telling the South Vietnamese they'd get a better deal under him. Mr Nixon's gambit may have ended up costing hundreds of thousands of lives. Mr Latham's may cost East Timor, or Australia, or both, billions of dollars.