The Southeast Asian nation sparked reactions last month as it reached a "common understanding on joint development in areas of overlapping claims" in a joint statement with China made during President Prabowo Subianto's visit to Beijing.

The statement was widely seen as recognition of China's sweeping claims in the South China Sea, where Beijing has for years sought to expand its presence in the contested waters and brushed aside an international ruling that its claim to most of the waterway has no legal basis.

"Indonesia maintains a position that there is no appropriate international legal basis in the nine-dash line issue," Sugiono, who goes by one name, told lawmakers, referring to a line China has used on maps to demarcate its claims to almost the entirety of the strategic waterway.

"The main principle is that Mr. President directed that Indonesia would increase cooperation with neighbours for the national interest. On sovereignty, we do not shift from our position."

He said Jakarta and Beijing had yet to agree on the areas for joint development projects, adding that Indonesia had informed leaders of neighbouring countries of the plan "to reduce tension".

Beijing and Jakarta are key economic allies, with Chinese companies ploughing money into extracting Indonesian natural resources in recent years, particularly in the nickel sector.

But confrontations over what Indonesia says are Chinese incursions into its territorial waters have weighed on the trading partners' relationship in recent years.

In October, Indonesia said it drove a Chinese coast guard ship from contested waters in the South China Sea three times in a week.