Firebrand Muslim cleric Abu Bakar Bashir and more than a dozen Bali bombers may get further automatic jail remissions within weeks despite pressure from Australia.
Also it emerged that Bashir was allowed out of prison for one day last week for hospital treatment for a bad back and might have to have further outside medical attention.
Indonesian officials are struggling to change the country's prison laws before the holy month of Ramadan when jail terms for most inmates are routinely cut.
A senior Justice Ministry official said "difficult" changes to exclude terrorists from sentence reduction programs were still being pursued. But it was unclear when they would be in place.
"The law will be revised," Hafid Abbas, the ministry's director-general of human rights protection told AAP from Bangkok. "There will not be the same policy for terrorism figures and ordinary criminals like a chicken thief. There will be special treatment for those who committed crimes against humanity."
Australia's ambassador to Indonesia David Ritchie lodged protests with Indonesia's justice minister Hamid Awaludin in August after Bashir received a four-and-a-half month sentence reduction as part of a general amnesty marking Independence Day.
Bashir is currently serving a 30-month sentence in Jakarta's Cipinang Prison for conspiracy in the Bali bombings, which killed 202 people including 88 Australians.
The sentences of 17 other men convicted of playing a role in the Kuta nightclub attacks were also automatically cut by three months.
Abbas refused to say if the changes would be completed in time to prevent another round of automatic remissions in November, when week-long Idul Fitri holidays come at the end Ramadan.
A further cut would see Bashir freed by May next year or even earlier.
"We will have to see if there is enough time to complete all the changes," Abbas said. "It would be easy if the changes were only to ministerial or presidential policy. But if it's related to government regulations or law, the process would not be simple."
The changes were still under discussion but Australia should recognise that Indonesia was determined to tighten the remission process, Abbas said. "It's the commitment that I think should be appreciated," he said.
He said officials were still discussing whether another reduction for Bashir could be prevented by Awaludin using his ministerial powers. "If it needs discussion with a lot of different parties, it's impossible to implement in a short time and we may have to use old regulations," he said.
Bashir, the alleged spiritual leader of the Jemaah Islamiah terror group, was allowed out of jail last week for medical treatment on his bad back.
The 67-year-old cleric's chief lawyer Muhammad Assegaf said Bashir had scans and X-rays taken of his back to look for signs of nerve damage before being taken back to jail.
Bashir denies being a terrorist leader. He says he is being victimised because of Western pressure and because he supports turning mostly-moderate Indonesia into a strict Islamic state.
Prime Minister John Howard and Indonesian President Susilo Bambang Yudhoyono discussed the remission policy last week at a private talk during the UN World Summit in New York.