“I am confident that if we work together on our shared aspiration to build a prosperous world based on fundamental freedoms, the partnership between the United Kingdom and Indonesia will continue to flourish,” she said.

She described Indonesia as having undergone a “remarkable transformation” since Yudhoyono came to power in 2004.

“It is now a thriving democracy and one of the world’s fastest growing economies,” said the queen, who visited Indonesia in 1974 with her husband Prince Philip.

“Your visit marks a further step in strengthening our relationship.”

In his own speech, delivered in Indonesian, Yudhoyono said the two countries “have many things in common, including in efforts to strengthen democracy”.

“I wish to reaffirm my country’s readiness to establish close co-operation with the United Kingdom,” he told the assembled guests, who included British Prime Minister David Cameron, other ministers and members of the royal family.

The guests were served Scottish halibut followed by a main course of chicken with baby artichokes and fondant potatoes, and a desert of iced green apple with a mulberry parfait made with fruit from the palace garden.

The queen wore a gold dress with a diamond necklace passed down to her from Queen Victoria, her great-great-grandmother.

She had earlier welcomed the Yudhoyonos with a military ceremony on Horse Guards Parade, the large parade ground in central London, where the visiting leader inspected the troops in their scarlet uniforms and bearskin hats.

The queen and Prince Philip then accompanied them in a horse-drawn state carriage procession along the Mall to Buckingham Palace, where the visiting couple are staying during their trip.

But dozens of protesters also turned out at Cameron’s Downing Street residence to greet the president over alleged human rights abuses in Indonesia, including torture.

Prominent rights campaigner Peter Tachell was arrested trying to reach the president’s car as he visited Westminster Abbey, the vast gothic church where the queen’s grandson Prince William wed Kate Middleton last year.

He accuses Yudhoyono of war crimes in West Papua and East Timor.

“I had wanted to attempt a citizen’s arrest of President Susilo Bambang Yudhoyono on charges of war crimes and crimes against humanity,” he said after his release.

“When this was not possible, I settled for displaying the West Papuan flag.”

Yudhoyono will hold talks with Cameron on Thursday and attend a meeting of the high-level United Nations panel that is drawing up a strategy on how to build on the Millennium Development Goals.

Yudhoyono, who is the world’s only head of state to have served as a UN peacekeeper, will also give a speech at the Royal College of Defence Studies.

The 15th-century Guildhall, in London’s financial district, will host a second banquet on Thursday night.

Several trade announcements are expected during the three-day trip, with Britain keen to gain access to Indonesia’s fast-growing economy and 240 million consumers.

The state visit is part of Britain’s drive to boost its diplomatic presence in Southeast Asia, with Indonesia regarded by British officials as the most influential player in the region.

As the world’s largest Muslim-majority country, it is also seen as a strategic ally in the Islamic world.

Britain usually hosts two state visits each year, but Yudhoyono is the only foreign head of state to receive the formal hospitality this year following months of diamond jubilee celebrations marking the queen’s 60th year on the throne.

The last state visit was by Turkish President Abdullah Gul in November last year.