Australia has agreed to return documents seized during an Australian Security Intelligence Organisation (ASIO) raid on the office of a lawyer representing East Timor's government in a spying case.

Since the ASIO raids on East Timor's lawyer Bernard Collaery and a former senior Australian Secret Intelligence Service (ASIS) officer in December 2013, East Timor has been seeking to have the material returned and took its case to the International Court of Justice (ICJ).

In a statement released early on Monday morning, East Timor's minister of state, Agio Pereira, said: "After 16 months of vigorously defending its right to take and keep the documents, the Australian Government has now written to the ICJ, stating that it wishes to return them."

Mr Collaery confirmed he expected the material to be handed back.

"There's been a formal consent order made and that was in The Hague [ICJ] last week," he said.

Former ASIS officer's passport issue 'still to be resolved'

At the time of the ASIO raids, East Timor and Australia had just begun arbitration over allegations of spying and the validity of a multi-billion dollar oil and gas treaty.

East Timor wanted the treaty governing the revenue split over the Greater Sunrise oil and gas field torn up, because it said Australia had spied on it in 2004 while the treaty was being negotiated.

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East Timor's key witness in the arbitration with Australia was a former officer in ASIS.

The agent, known as Witness K, was also a target of the ASIO raids.

Mr Collaery said he welcomed the return of the seized material, but added there were still other significant matters to resolve, particularly for Witness K, whose passport was cancelled.

He said he expected Witness K would be allowed to reapply for a passport and would "be reissued a passport as soon as possible".

Decision consistent with 'friendly, bilateral relationship'

Mr Pereira said the return of the documents was in keeping with the "friendly, bilateral relationship" East Timor was seeking to build with Australia.

He suggested the two countries were not close to reaching an agreement on the underlying dispute over oil and gas reserves in the Timor Sea.

He indicated East Timor's bid to have the treaty governing the lucrative Greater Sunrise field declared invalid may not be over, saying East Timor was "reserving its rights" and taking legal advice.

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Last September East Timor agreed to a request from Australia to suspend all legal proceedings for six months to seek an "amicable agreement", but Mr Pereira said the break had not produced a schedule for talks on a permanent maritime boundary.

"Timor-Leste agreed to Australia's request with the proviso that bilateral discussions during the adjournment period should produce a roadmap for structured talks on the delimitation of permanent maritime boundaries," he said.

The deadline passed in March this year, but Mr Pereira said there had been little progress on a schedule for negotiations.

Settling case 'amicably' in ICJ

East Timor has called for a permanent median-line boundary to deliver what it says is its fair share of revenue from the Greater Sunrise field, estimated to be worth tens of billions of dollars.

East Timor and Australia don't have a maritime boundary but under current treaties the Greater Sunrise revenue is to be split 50-50 between the two countries even though the field lies closer to East Timor's coast.

Mr Pereira suggested East Timor's new prime minister Rui Araujo would continue to push the country's case.

Australia's Foreign Minister Julie Bishop said after six months of talks, Australia had offered to return the seized documents in order to settle the case in the ICJ amicably.

Ms Bishop said a deal to produce a structured plan for bilateral talks on a maritime boundary was never part of the agreement to suspend the legal proceedings.