Defence Minister Yuwono Sudarsono said after talks with President Susilo Bambang Yudhoyono and the head of the country's intelligence agency that both sides needed to show restraint to prevent an escalation of tensions.

"The president only said that there is already an agreement with (Malaysian) Prime Minister (Abdullah) Badawi that what is important is that it should not be repeated again and that no war of words at the diplomatic level breaks out.

"What is important is that both sides show restraint," he said.

He said that according to reports there were now fewer Malaysian military ships in the disputed area off the coast of Borneo island where Indonesian and Malaysian navy vessels brushed sides several times on Friday.

But Sudarsono said Indonesian military patrols would remain in place.

"The operations there will continue, so that not even an inch of what is our right is lost," he said.

"There will be no reinforcement, but we are prepared, in case anything happens, to immediately launch reinforcements," military commander General Endriartono Sutarto said.

Indonesia is building a lighthouse in the area where warships from both countries have come into close contact several times since February 16 when Malaysia granted an oil concession to Anglo-Dutch firm Shell.

Jakarta says the blocks awarded by state oil firm Petronas are not in territory controlled by Malaysia.

Last month officials from both sides began negotiations to settle the dispute. They are to meet again in May.

The two countries have locked horns over the region before. A dispute over the ownership of two islands ended in December 2002 with an International Court of Justice ruling that the islands belong to Malaysia.

Indonesia waged a limited war against Malayan and British forces over the future of Borneo island in 1963 after the British relinquished control. The conflict ended three years later as Jakarta focused on internal problems.