“We have to be honest and straightforward about the problems in the past,” he said. “But both

Britain and Indonesia have made significant changes since then.

“In Britain we now have what is one of the most rigorous and careful arms licensing systems in the world, to ensure that arms do not fall into the hands of those who might misuse them. But at the same time we believe that democratic and responsible countries like Indonesia have a right to defend themselves, and to buy the equipment needed to do so.”

He added that the Indonesian military “no longer plays a role in politics”.

Mr Cameron is expected to urge Islamic countries to embrace democracy like Indonesia and Malaysia, where he is heading on the next leg of his trip. On Friday he is expected to go to Burma, becoming the first Western leader to visit the country since its military junta handed over to a quasi-civilian regime.

Mr Cameron is also likely to meet Aung San Suu Kyi, the campaigner for democracy, who was released from years of house arrest in November 2010 and has been elected to Burma’s parliament.

Mr Cameron’s whole tour is aimed at promoting British exports, starting in Japan, the world’s third largest economy.

He spent yesterday with Yoshihiko Noda, the Japanese prime minister.

Britain is making a big push to sell defence equipment in Japan, after it loosened its rules on building up military defences in December.

Mr Cameron also hailed a £336 million deal between Airbus, a European aircraft maker, and the Garuda Indonesia airline.

He said the sale of 11 A330 aircraft was "testament to the expertise of Airbus's British workforce" and would protect jobs in Bristol and Broughton.