Australia is considering lifting a ban on military co-operation with the controversial Indonesian special forces unit Kopassus.

Defence Minister Robert Hill said accusations that Kopassus was involved in atrocities against dissidents in East Timor and Papua during the 1990s should be put aside in the interests of fighting terrorism.

You could argue that sends the wrong message in terms of the sort of values that we think underpin a civilised society

Robert Hill

He said the bombing in Bali last month, which killed nearly 200 people, mostly Australians, together with further threats of terrorism, meant it was time to talk seriously about co-operation.

He stopped short of saying that Australian and Indonesian special forces should work on joint operations, but spoke of exchanging techniques and strategies on counter-terrorism - such as those developed for the Olympic Games in Sydney in 2000.

"Kopassus is the counter-terrorism capability in Indonesia, and to defeat terrorists requires co-operation and mutual support," said Mr Hill.

"You could argue that sends the wrong message in terms of the sort of values that we think underpin a civilised society.

"On the other hand, let's say there's an aircraft hijacking or something like that in Indonesia, it would be Kopassus that would be called in to address it.

"I think there are a lot of Australians who would say that we should be able to deal with Kopassus in those circumstances."

Torture and abduction

Australia has declined to work with Kopassus in recent years because of its record on human rights, including allegations that its agents tortured and abducted dissidents during the 32-year rule of former President Suharto.

Indonesian military prosecutors are examining dossiers on seven members of the unit as they try to solve the murder of Papua separatist leader Theys Eluay, whose body was found in his overturned car in the far eastern province last November.

Amrozi was arrested in East Java

Kopassus has repeatedly said it did not order the killing.

About half of those who died in the bombing of a nightclub area on the holiday island of Bali were Australians.

Indonesian police say they believe about 10 people who carried out the attack are still in the country.

A man named Amrozi, who police say has admitted his involvement in the bombing, faces the death penalty.

No-one has claimed responsibility for the attack, but suspicion has focused on Osama Bin Laden's al-Qaeda terror network and Jemaah Islamiah, a militant South East Asian Muslim group.

The two organisations are said to maintain links.