A secret ''Australian-eyes-only'' cabinet submission shows that the Fraser Government feared continued objections to Indonesia's takeover of East Timor would ''seriously harm'' Australia's relations with the nation.
The 1978 cabinet papers released by the National Archives today reveal the triumph of expediency behind the decision by Prime Minister Malcolm Fraser's Government to formally recognise Indonesia's military takeover of East Timor.
Although former Labor prime minister Gough Whitlam copped much political flak for his handling of the East Timor issue in the lead-up to Indonesia's December 1975 invasion, his successor Mr Fraser largely escaped criticism even though it was his Government that caved in and recognised Indonesia's seizure of the former Portuguese colonial territory.
According to the submission presented to cabinet by then Foreign Minister Andrew Peacock in January 1978, there were ''signs that the patience and understanding of a growing group of influential Indonesians in the government are running out and I believe the point has been reached where our continued refusal to accept fully and formally the reality of the situation in East Timor could damage the relationship''.
Significant portions of Mr Peacock's cabinet submission have been withheld from public release, suggesting that the Foreign Minister also warned cabinet that Australia's bilateral intelligence cooperation with the Indonesian military could be jeopardised if differences over East Timor persisted.
The submission makes no mention of the brutality of the Indonesian military occupation of East Timor which was well documented by Australia's intelligence agencies.
Small-scale Timorese resistance was expected to continue for some time, but it was expected that opposition to Indonesian rule would ''continue to fade and it will become just another of the 20 or so irredentist movements which the Indonesians have suppressed in the archipelago since independence''.
Instead, the main problem was seen to be Australian domestic politics, largely the influence of a small but active pro-Timorese lobby, including figures such as former diplomat Jim Dunn.
The Australian media was also identified as a difficulty as a consequence of the deaths of five Australian journalists by Indonesian forces in East Timor in 1975, and MrPeacock recommended that announcement of a policy change be preceded by personal contact with selected newspaper editors.
Cabinet decided on January 1978 that all future Australian policy toward Indonesia would be based ''on the acceptance of the proposition that Indonesia exercises sovereign power so far as East Timor is concerned''.
The form of recognition was in turn determined by the Government's desire to open negotiations on the seabed boundary between Australia and East Timor and thus access the oil and gas reserves believed to be located in the region.
Woodside Petroleum and Australian Aquitaine Petroleum were keen to begin seismic surveys and drilling, but were reluctant to do so in the absence of seabed boundary determination.
In a further submission to cabinet in November 1978, Mr Peacock recommended a low-key announcement of the opening of negotiations as the best approach.
With cabinet's agreement, seabed boundary negotiations with Indonesia commenced in February 1979.
However, notwithstanding the Fraser Government's preparedness to accommodate Indonesian interests and sensitivities, the bilateral relationship remained fragile.
After a visit to Jakarta in late 1978, then Defence Minister Jim Killen reported that Indonesian leaders were disappointed with the Australian Government, but a ''bigger source of irritation'' was the Australian media.
Mr Peacock agreed, telling cabinet in December 1978 that ''the Indonesians find it difficult to accept that their most persistent critics in Australia will continue to be independent of the Government and ... that they contribute significantly to the context in which government policy is made''.
Cabinet agreed the Government needed to be ''ready, where appropriate, to consider correcting inaccurate or ill-informed press reporting on Indonesia, damaging to the relationship''.
In the minds of Australian policymakers, the problem was not the Indonesian military's occupation of East Timor, but media reporting of the resultant atrocities.
Pragmatism rather than principle triumphed.
But that, as former Australian ambassador to Indonesia, Richard Woolcott, once famously said, is what the ''national interest'' is all about.