Prime Minister Abdullah Ahmad Badawi said Malaysia has a "strong case" for sovereignty over an oil-rich maritime area also claimed by neighbouring Indonesia.

Malaysian warships, which have recently come into close contact with Indonesian navy vessels, would remain in the area east of Borneo island to protect the territory, he told a news conference.

Abdullah's remarks come after Indonesia Tuesday sent a protest note to Malaysia over an incident last week in which warships from the two neighbours brushed sides.

"They (Malaysian warships) have not left the area. We also think we have a strong case," he said.

Deputy Prime Minister Najib Abdul Razak said Malaysia regarded the territory as its own and hence had the right to have a naval presence in the area.

"That area is regarded as our territory. We have the right to be there whenever we want," he said.

Meeting at Batam

Indonesian Foreign Minister Hasan Wirayuda said Wednesday a scheduled meeting between naval chiefs of the two countries would be held in "one or two days" on the Indonesian island of Batam, just south of Singapore, to discuss "how the tension in that region can be reduced".

Tensions rose when Malaysia on Feb 16 granted an oil concession in the region to Anglo-Dutch firm Shell, a move that angered Jakarta.

Indonesia, meanwhile, is building a lighthouse to strengthen its territorial claims in the disputed region.

The two countries have locked horns over the region before. A dispute over the ownership of two islands ended in December 2002 with an International Court of Justice ruling the islands belong to Malaysia.

Indonesia waged a limited war against Malayan and British forces over the future of Borneo island in 1963 after the British relinquished control. The conflict ended three years later as Jakarta focused on internal problems.