Indonesia has hailed the return of the founder of Free Papua Movement as a first step towards negotiating peace with the rebels in the troubled province.

Nicholas Jouwe, 85, has lived in exile for 40 years.

Mr Jouwe is credited with being the creator of the banned Morning Star flag which symbolises Papuan identity and has become synonymous with the province's independence movement.

Independence supporters are still regularly jailed for raising the flag.

Returning to Indonesia from the Netherlands for the first time in 40 years, Mr Jouwe has met with ministers in Jakarta before meeting with President Susilo Bambang Yudhoyono and travelling to Papua over the weekend.

Welfare Minister Aburizal Bakrie says he hopes the conflict with rebels in Papua could eventually be resolved with a deal like that which brought peace to Aceh in 2005.