Suharto (file photo)

Indonesia's highest court has ordered TIME to pay $106 million to Mr. Suharto for defaming him in a 1999 article. The magazine had alleged the former dictator and his relatives amassed billions of dollars during his 32-year rule and stashed much of it overseas.

In its story, TIME said it traced about $15 billion accumulated by the Suharto family after a four-month investigation in 11 countries.

The Supreme Court also ordered six TIME journalists to apologize to Mr. Suharto in leading Indonesian newspapers, and in TIME magazine itself.

Mr. Suharto originally filed the suit in 1999. The Supreme Court's ruling overturns two lower court decisions in TIME's favor.

A court spokesman says the panel of three justices found that TIME's article damaged Mr. Suharto's reputation and the lower courts wrongly applied the law.

Vincent Brossel from the Asia-Pacific Desk of Reporters Without Borders says the ruling calls into question the credibility of the Supreme Court.

"We don't understand and we think that it's a real problem for the credibility of the Supreme Court and also it gives the bad impression that inside the justice system there are more supporters of defending Mr. Suharto's legitimacy and less efforts to try to get back all the millions, or billions he wrongly took in the past," he said.

TIME's lawyers say they will fight the ruling. But, under Indonesian law, the only legal option open to them would be to request a judicial review, which requires the introduction of new evidence or a procedural dispute.

Brossel says there is concern that if the Supreme Court upholds the decision, it will be a step back for the nation's press freedom, which has been jealously guarded and nurtured since Mr. Suharto's fall from power.

"In the case that the Supreme Court is not changing it's mind - that will be a very dangerous step for the press freedom. I think there have been great achievements in the recent years - especially after Suharto fall down. So if this type of case happens again, that will be very dangerous for the Indonesian media," said Brossel.

TiIME's Indonesia lawyer, Todung Mulya Lubis, notes that although Mr. Suharto's fall ushered in a new era of reform in Indonesia, there are still elements of authoritarianism in the country's institutions.

"Let me put it this way. The supporters of Suharto are still within the government, within the parliament, within the judiciary within the business of society. They may not be as strong as in the past but they are still there. We are fighting against that. So this judgment of the Supreme Court is really a blow for democracy, for the freedom of press," said Todung Mulya Lubis.

Massive student protests over the worsening Asian economic crisis forced Mr. Suharto to resign in 1998.

The 86-year-old former leader has successfully evaded prosecution on charges of embezzling state funds ever since. His lawyers have argued he is too ill to stand trial.