Malaysian Deputy Prime Minister Najib Razak has downplayed a growing dispute with Indonesia over a maritime oil field, saying diplomacy rather than military strength was needed to resolve the row.

"It is not Malaysia's way to use the military to resolve a conflict, Najib, who is also defence minister, was quoted as saying by Bernama news agency in the eastern Sabah state on Borneo island.

"We don't want to blow up this matter. We leave it to the foreign ministries of both countries to handle the issue," he added.

Najib had been asked to respond to Indonesian allegations that a Malaysian naval aircraft intruded into Indonesian airspace over the Sulawesi Sea on Thursday.

The Indonesian navy had dispatched four warships to the disputed area off the coast of Malaysia's Sabah state and Indonesia's East Kalimantan province.

Jakarta sends formal protest

Tensions had risen between the countries after Jakarta protested a move by Malaysia's state oil company Petronas to grant energy giant Shell a concession in the area on February 16.

Jakarta says the area is part of its territorial waters and some of the concession granted by Malaysia overlaps with one granted by the Indonesian government to Italy's ENI and the US company Unocal in the 1960s.

The Indonesian government has sent a formal protest to Malaysia over the matter.

Indonesia and Malaysia previously disputed the ownership of two small islands near the same area in the Sulawesi Sea.

But in December 2002, the International Court of Justice ruled that the islands - Ligitan and Sipadan off Borneo island - belong to Malaysia.