Labor has pledged to submit to international adjudication over the disputed maritime boundary between Australia and East TImor if "good faith" negotiations fail to produce agreement.

The proposed deal on a new sea border, announced by opposition foreign affairs spokeswoman Tanya Plibersek at the National Press Club on Wednesday, could potentially give the fledgling country a far greater share of the rich deposits of oil and gas in the Timor Sea, estimated to be worth $40 billion or more.

Deputy Opposition Leader Tanya Plibersek addresses the National Press Club. Credit:Alex Ellinghausen

Ms Plibersek lamented that Australia's pivotal role in securing East Timor's independence - "a proud moment" - was being tarnished by its refusal to negotiate a new, permanent maritime boundary with East Timor.

"The maritime boundary dispute has poisoned relations with our newest neighbour. This must change for their sake and ours," Ms Plibersek said.