World War II veterans will appear in ads on Anzac Day aimed at embarrassing the federal government over the carve up of oil and gas reserves with East Timor.

East Timor has argued it is being cut out of billions of dollars through an incorrect understanding of the sea boundaries.

At stake are oil and gas deposits worth an estimated $41 billion and negotiations between the two countries are continuing. Australian businessman Ian Melrose, who is funding the TV ads from his own pocket, said the Anzac Day ads would feature Australian World War Two veterans who fought the Japanese on Timor. All were angry about Australia's stance on the deal, Mr Melrose said.

Mr Melrose is part of a so-called people's delegation including Catholic Bishop Hilton Deakin and Greens Senator Bob Brown, which on Monday delivered a letter of protest signed by prominent Australians.

"We're here today to try and encourage the Australian government to act honourably [and] to not use time as a weapon against the East Timorese, which is what the Australian government has been doing, and it's unacceptable to do so," Mr Melrose told reporters.

"We're also here today to impress on everyone that the Australian government did the wrong thing on March 25, 2002, which is the day on which the Australian government withdrew recognition of the international court to hear the dispute about the ownership of oil and gas." Catholic Bishop Hilton Deakin said he wanted to speak for all Australians of good will and people who believed in a fair go.

"The way in which our governments have behaved in the past in ignoring jurisdictions by withdrawing from them, redefining boundaries and redefining principles about boundaries, is nothing short of a very sophisticated way of depriving the people of what nature gave them," he said.