Tony Blair arrived in Jakarta late last night to launch a new offensive against terrorism involving intelligence sharing between the countries, which, ministers hope, could unmask al-Qaeda cells in Britain.

The intention is that there will be a new level of co-operation between police and intelligence forces to track down groups such as Jamaah Islamiyah, who were behind the Bali bombings of 2002 that left 202 dead, including 26 Britons.

Mr Blair is on the last leg of his tour for a summit designed to normalise relations after Indonesia’s embrace of democracy.Today he will join President Yudhoyono in signing a memorandum of understanding on security co-operation.

Mr Blair’s visit is intended to show Britain’s support for “moderate Islam”. He and the President will announce the establishment of an Indonesia-UK Islamic advisory group made up of leading Muslims from both countries. Its task will be to advise on how extremism can be countered and mutual tolerance promote from within the Islamic faith.

Despite continuing concerns about Indonesia’s human rights record, Mr Blair has decided that it should be brought in from the cold because of its move to democracy and Mr Yudhoyono’s record as a campaigner against corruption and improver of the justice system.

Officials said that people should recognise that Indonesia was “on a long journey and has moved a long way”; the President had been elected by 60 per cent of the people in the first direct elections.

But is is clear that the need to co-operate on terrorism has been a key factor in speeding up the improvement of relations, which will be upgraded on several fronts. The foreign ministers will meet annually, defence relations are to be brought back to normal and another project will link 1,000 schools in the two countries.

Mr Blair, who will meet survivors of the tsunami, will also announce an extra £25 million of development assistance.

Today’s agreement is expected to help Scotland Yard’s investigations into the threat of Islamic terrorism. British police have studied claims that Mohammad Sidique Khan, one of the July 7 suicide bombers, visited the Far East in 2002 and 2003 to study explosives under Azahari bin Husin, a British-educated terrorist known as the “Demolition Man”. Bin Husin, who orchestrated the Bali bombings, studied at the University of Reading.

He ran training camps for bombers in Indonesia and Malaysia but is remembered by colleagues and neighbours in Berkshire as “a shy, well-mannered family man”. He regularly visited extremist mosques in London with fellow student supporters of Jamaah Islamiyah.

He blew himself up last November when anti-terrorist police surrounded his hideout in Indonesia.

EMERGING NATION

Geography An archipelago of 6,000 islands located between the Indian and Pacific oceans

Capital Jakarta

Population 225 million

Per capita income £657

Government President Yudhoyono, a former army general, took office in 2004 in the country’s first democratic elections. The country had lived under the dictatorship of President Suharto

Religion Almost 90 per cent of Indonesians are Muslim. Since 2001 there have been problems with Islamic extremism. The Bali bombing in 2002 killed more than 200 people

Explore Asia News

• China News

Times Recommends

• Putin set to bait US with nuclear aid for Tehran
• North Korea ‘uses doubles to hide death of Kim’
• Academics label Charlie Wilson too 'gung-ho'