The Indonesian government will set up a special team to develop 92 small islands in border areas after losing two of them to Malaysia, a report said today.

The World Court ended years of dispute in December 2002 by awarding the islands of Sipadan and Ligitan to Malaysia because Kuala Lumpur had asserted authority over them since the 1930s.

Alex Retraubun, director of small islands development at the marine resources ministry, said about half the small border islands were inhabited but had largely been bypassed by development programs.

"With the formation of the special body it is expected that various programs can be made to promote development in the islands," he was quoted by Antara news agency as saying.

The team will consist of ministers, provincial governors and district heads.

Indonesia, the world's most extensive archipelago, has 18,108 islands, of which about 6,000 are inhabited. - AFP