AN OFFER by a notorious Jakarta gangster to develop the site of a refugee camp in Dili has been accepted by the East Timor Government.

The East Timorese-born man, Hercules Rozario Marcal, has close links to Soeharto-era generals in Indonesia, including one charged by the United Nations with orchestrating the destruction of East Timor after the 1999 independence ballot.

The Timor Post has confirmed that Hercules has been given the go-ahead to build a mini-mart and swimming pool on the site opposite Dili's main wharf.

Investigators have established that Hercules had contact with, and may have met, the rebel leader Alfredo Reinado days before he led the February 11 attacks on the President, Jose Ramos Horta, and the Prime Minister, Xanana Gusmao.

Reinado's mobile telephone had a listing for "Hercul".

Two rebels involved in the attacks were arrested at Hercules's Jakarta residence in April.

Hercules has denied any involvement in the attacks.

He gained notoriety in Jakarta in the 1990s running protection rackets.

His gang also served as enforcers for the Soeharto regime, intimidating dissidents and East Timorese independence activists. His military patrons were reputed to include the then general Parbowo Subianto, Soeharto's son-in-law.

At one stage he lived in the house of Major-General Zacky Anwar Makarim, indicted by a UN war crimes tribunal in 2003 for crimes against humanity.

Hercules told East Timorese journalists in January he was looking at investing in hotels and real estate in East Timor.