Updated

Australia on Wednesday denied reports it had agreed to treat young Indonesian people smugglers more leniently in return for Indonesia reducing the prison sentence of a high-profile Australian drug trafficker.

But Foreign Minister Bob Carr conceded that Indonesians saw a link between the treatment of Australian Schapelle Corby and young Indonesians held in Australian prisons.

Corby, 34, learned in a Bali prison on Tuesday that Indonesian President Susilo Bambang Yudhoyono had granted a five-year reduction of a 20-year sentence for her 2005 conviction for smuggling marijuana onto the resort island. Her lawyer said that since several other cuts to her sentence were approved previously, she could be freed in about three months.

The successful bid for clemency comes a week after Australia released three young Indonesians from prison based on new evidence that they might not be adults. Crew members of Indonesian people smuggling boats who illegally bring asylum seekers to Australia are sent home without punishment if they are children.

Australian Broadcasting Corp. reported that Indonesia's Minister of State Secretary Sudi Silalahi said Corby's sentence reduction was part of a reciprocal deal in which Australia would be more lenient toward young Indonesians arrested for crewing asylum seeker boats.

Indonesian Minister for Justice and Human Rights Amir Syamsuddin also said the sentence reduction should encourage Australia to release more young Indonesians held in prison, ABC reported.

"That's how the Indonesians see it," Carr conceded. But he denied that Australia's decision was part of any reciprocal agreement.

"We'd be making that decision about those minors if there were no Schapelle Corby and indeed no Australians serving time in Indonesian jails," Carr said. "We'd be doing it because it's unconscionable to hold minors in adult prisons."

"If that's created a level of goodwill in Indonesia that has helped make this decision possible, then that's fine," he added.

He said both Corby and the incarceration of young Indonesians in Australia were on the agenda of an inaugural bilateral summit involving foreign and defense ministers in Canberra in March. He said Australia had undertaken to release Indonesian prisoners if evidence emerged that they were minors.

"In all sincerity, they can see the issues as being linked, but for our own part, we would have been making the decision on minors if there were no Australians in any Indonesian prison," Carr said.

Corby's lawyer, Iskandar Nawing, said Indonesian authorities agreed to reduce her sentence because of her poor mental state.

Corby's case has attracted intense and sustained media attention in Australia, where many people believe she is innocent of the crime which she has consistently denied. To be "schapelled" has emerged as an Australian slang word for suffering a harsh injustice.