The claims come in a paper from the International Crisis Group (ICG) office in Jakarta, released yesterday.

In an outline of the lives and relationships of key figures in Indonesian Islamic activism dating back to the 1950s, the paper describes how a hardcore of Muslims was radicalised by the repression of the Suharto era.

It also says that efforts to repress them now would only elevate them to hero status, and risk Indonesia's push for democracy.

Drawing on court documents, interviews and historical research, the report focuses on figures such as radical cleric Abu Bakar Bashir, dubbed a terrorist by Singapore's intelligence services.

Others mentioned include four key targets of the US-led effort to battle so-called terrorism: Hambali, also known as Riduan Isamuddin or Nurjaman, who is thought to be al-Qaeda's main Indonesian contact; Abu Jibril, also known as Fikiruddin Muqti or Mohamed Iqbal bin Abdurrahman, who has been detained in Malaysia since January; Fathur Rahman al-Gozi, detained in Manila since January; and Agus Dwikarna, detained in Manila since March on charges of illegal possession of explosives.

'It is important to underscore that with the exception of Fathur Rahman al-Gozi, who has been sentenced by a Philippines court to two terms of 12 and six years respectively, and Hambali, who has not been apprehended, no convincing evidence of involvement in terrorist activities has been made public against these suspects,' the paper says.

It also says Indonesia 'is not a terrorist hotbed'. It adds that even its own newly gathered information about links between these men and their exploits, which include fund-raising operations and the sending of a handful of cadres to Afghanistan - do not point to terrorist activity.

The report describes how cleric Mr Bashir helped found an Islamic boarding school, Pondok Ngruki, near Solo in Central Java. He was imprisoned, released and then tried again by former Indonesian president Suharto's government, and as a result fled to Malaysia in 1985.

He maintained close connections with Indonesian colleagues in the anti-Suharto Islamic movement as well as forging links with Malaysian radicals, and returned to Indonesia when Suharto fell.

'The problem is that the Ngruki network is far wider than the handful of people who have been accused of ties to al-Qaeda, and includes individuals with well-established political legitimacy for having defied the Suharto government and gone to prison as a result,' says the report.

'Association with the Ngruki network is not equivalent to terrorism, and yet the possibility remains that some members . . . may be sources of support for criminal activities.

'But repression helped give birth to the network, and it would be a major mistake to encourage the Indonesian government, or other governments in the region, to re-institute the kind of arbitrary practices that Suharto's resignation was supposed to bring to an end.'