INDONESIAN police continue to investigate an alleged plot to stage a terror attack in Bali following the arrest of a man believed to be linked to Islamic State.

A man, referred to only as DA, was arrested by police on August 15 in Lampung over his role in a suicide bomb attack at Surakarta police station on July 5 this year.

Nur Rohman, who carried out the attack, killed himself and injured an officer.

National Police spokesman Agus Rianto said DA helped carry out the attack by transporting explosives from where he lives in Lampung, a province northwest of Jakarta, to Surakarta in Central Java, also known as Solo.

Police are also investigating a plot involving DA to attack Bali. No further details of that plot are known at this stage.

According to Mr Rianto, DA is a suspected member of the terrorist network run by the IS-linked Indonesian militant Bahrun Naim in Syria.

Around five million rupiah ($A500) is suspected of being transferred to people within Bahrun Naim’s network in Indonesia to carry out both attacks, Mr Rianto told reporters on Friday.

During a search of DA’s house on August 16, police allegedly discovered iron shrapnel, cable and PVC pipe, while at the internet cafe where he worked white powder was found.

It is believed to be triacetone triperoxide (TATP), the same substance used in the Paris attack, Mr Rianto added.

It is not the first time Bahrun Naim and his followers have allegedly been behind attacks and planned attacks in Indonesia.

Earlier this month five men were detained over a failed rocket attack on Singapore from neighbouring Batam Island.

Meanwhile in June, teenager Ibadurrahman, also known as Ibad, was jailed for five years over his part in a foiled IS-led plot to bomb churches, police and a Buddhist temple on Indonesia’s Independence Day last year.

Ibad, who planned to attack Solo, was allegedly acting under the direction of Bahrun Naim.