Australia was one of the few countries to recognise the 1976 annexation of East Timor by President Suharto's "New Order" government. The 1998 resignation of Suharto and replacement by his reformist protégé, B.J. Habibie, created an opportunity in both countries for policy reform. Habibie was suggesting East Timor receive special autonomy status within the Indonesian republic, which he offered as part of United Nations (UN)-mediated negotiation process between Indonesia and the territory's former colonial ruler, Portugal. Australian policy also changed. From a position of not supporting any act of East Timorese self-determination, the Prime Minister and Foreign Minister Downer formulated a shift in policy to suggesting not just autonomy but a political solution that included a referendum on independence be provided in about a decade. This was developed confidentially without the knowledge of Cabinet, and outlined in a December 1998 letter to Habibie suggesting the Indonesian government prepare for such a referendum.