A government official has also hinted it may bring in Malaysia's Petronas to develop the field.

Reuters quoted East Timor Secretary of State Agio Pereira as saying the government would not support Woodside's development plans for the field, which lies partly in the Joint Petroleum Development Area.

He also questioned the commercial viability of Woodside's proposal to pipe gas to Darwin as well as the use of an FLNG plant.

East Timor has long called for gas from Greater Sunrise to be piped to a plant in the country, where it is hoped it would create jobs and boost the economy.

The increasingly hardline stance the country has taken against Woodside's plans shows its displeasure towards the company's decision to eliminate an East Timor development from its options.

Woodside has previously argued building a 200-kilometre pipeline in deep waters across a deep ocean trench would lead to greater costs and technical risks.

"The Timor-Leste pipeline option had been eliminated unilaterally by Woodside without proper due assessment," Pereira added.

Resources ministry director of communications Manuel Mendonca told Reuters East Timor just wanted to bring the pipeline from the field to East Timor and would contract another company to develop Greater Sunrise if Woodside did not change its position.

"The Malaysian company Petronas is qualified to develop the Greater Sunrise field," he said.

The East Timor stance is likely to delay Woodside's plans to achieve a final investment decision on the project by 2011.

Woodside said it was working with its joint venture partners to finalise a development theme that would meet the requirements laid out in the treaty between East Timor, Australia and the Sunrise JV participants.

This would be followed by working with the two governments to secure the timely approval of a development plan.

Woodside's plans for an FLNG development would see the vessel located over the Sunrise fields to maximise recovery.

It would be capable of producing 4 million tonnes of LNG per annum along with condensates through a phased development with seven initial production wells.

The Darwin option would require a floating production, storage and offtake vessel over the fields to maximise recovery as well as a 542km pipeline to take the dry gas to the Darwin LNG plant, which would be capable of producing up to 5 million tonnes per annum.