They also agreed to pursue Malaysia's proposal of a common time zone for all Asean capitals, which it raised at last month's meeting of the region's foreign ministers.

Malaysia believes the move would help integration of financial markets in Southeast Asia.

Najib and Widodo agreed in principle that fishing vessels found in waters claimed by both countries would only be expelled with no further action taken, but those encroaching in opposing waters can be punished under existing laws.

"We agreed to appoint special envoys, so issues on maritime borders can be settled as they have remained unresolved for too long," Widodo told a press conference after this morning's bilateral meeting with Najib.

Najib also explained that a technical committee has already met 26 times over territorial disputes - with another round of talks set for February 26 - without "significant progress."

The Malaysian leader said the envoys - one each from Jakarta and Kuala Lumpur - would pursue "a formula acceptable to the government and people of both Indonesia and Malaysia."

Friday's accord over fishing waters comes on the back of newly inaugurated Widodo's policy of sinking foreign vessels found in its seas. It is unclear if this will continue as part of "legal action" agreed to by the two governments.

There was, however, no new steps taken to address the treatment of Indonesian workers in Malaysia despite several recent high-profile cases of abuse - including the 2011 murder by starvation of a 26-year-old maid.

The two leaders said both countries would continue discussions to ensure only official channels are used for Malaysians to employ Indonesian domestic helpers.

Najib said only 4,000 were employed using this method - which offers the maids training and protection - which was agreed in 2011, as opposed to over 100,000 brought over unofficially. (***)

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