Lindsay Murdoch, Dili – The Australian Federal Police has defended an officer accused of ordering a senior East Timorese policeman to take off his uniform in public, saying two inquiries had found the officer had acted appropriately.

But in a statement released by East Timor's parliament, the country's powerful Interior Minister, Alcino Barris, disputed the agency's interpretation of regulations governing Timorese police and said he would lodge a formal protest about the incident with the Australian embassy in Dili.

"The Australian police did not respect either the dignity of the Timorese police institution or the dignity of Timor-Leste [East Timor] as a sovereign country," Dr Barris said. The statement said Dr Barris told MPs there was no instruction by the Timorese Government that directed Timorese police not to wear their uniforms in public. "The minister defined the event unacceptable," it said.

The confrontation between an unidentified Australian Federal Police officer and the chief of East Timor's police academy, Julio Hornai, on a main road in Dili on Saturday prompted an angry response from East Timorese MPs, several of whom argued that the Government should retaliate by asking the Australian police to leave the country.

The commander of the 200-strong Australian police contingent in Dili, Steve Lancaster, told reporters late yesterday that Inspector Hornai became "agitated" and took off his uniform shirt and handed it to the Australian officer, who had explained to him that there was an agreement in place that Timorese police should not wear their uniforms in public. Commander Lancaster said the Australian asked Inspector Hornai to put the uniform back on.

But Inspector Hornai has given a different version of the incident, saying that the Australian repeatedly demanded that he take off the uniform. He said he was "humiliated" by doing so in front of about 40 onlookers.

Inspector Hornai said he and his men were ordered to wear their uniforms to an official briefing at police headquarters that was attended by dignitaries including the head of the UN's Dili mission, Sukehiro Hasegawa, and Dr Barris.

Commander Lancaster said an inquiry conducted by UN police had supported his own findings that at no time did any Australian police officer direct East Timorese police to take off their uniforms in public.

Commander Lancaster said the Australian police had acted in good faith in the incident. It was for the safety and wellbeing of the East Timorese police that they had been directed not to wear their uniforms in public because of "mixed community feelings" towards them, he said.

Inspector Hornai is one of the most senior officers still serving in the Timorese police after the 3200-strong force disintegrated when violence erupted in Dili in late April. The academy he runs will be at the centre of UN efforts to rebuild the force.