JAKARTA – New York-based Time magazine will fight an Indonesia court order to pay $106 million for defaming former dictator Suharto by alleging his family amassed billions of dollars during his 32-year rule, a lawyer said today.

Todung Mulya Lubis called the August 31 decision “a serious blow” to the press freedoms and a setback for reform of the country’s judiciary.

The magazine says the May 1999 cover story in its Asian edition was based on four months reporting in 11 countries and uncovered a complex network of corporate investments, bank transfers and property holdings in Switzerland, Uzbekistan and Nigeria.

It alleged that Suharto and his children amassed more than $15 billion dollars, much of which was transferred from Switzerland to Austria before the strongman stepped down amid riots and pro-democracy protests nearly a decade ago.

“Time magazine will take any legal measures available to defend freedom of the press,” Mr. Lubis told reporters in the capital Jakarta, though he did not elaborate. “We believe it is important to uphold justice and the truth.”

Suharto, who has also been accused of widespread human rights abuses, initially filed a lawsuit with the Central District Jakarta and later the Jakarta High Court, both of which ruled in Time’s favor.

A panel of three Supreme Court judges, including a retired general who rose in the military ranks during Suharto’s administration, overturned the decisions and ordered Time Inc. Asia to pay $106 million.

It also demanded that six magazine employees apologize in leading Indonesian magazines and newspapers as well as Time’s Asian, European and America editions.

“I don’t understand why the panel of judges was led by a Supreme justice with the background of an army general,” said Mr. Lubis. “This is a very big question… why is a military man deciding a press (freedom) case?”

Suharto, now 86, seized power in a 1965 coup that left up to half a million people dead and ruled the country with an iron fist for the next three decades, killing or imprisoning hundreds of thousands of political opponents.

He has evaded prosecution on charges of embezzling state funds, with lawyers successfully arguing he is too ill to stand trial, and has never been tried for human rights abuses.

The Time article, titled “The Family Firm,” alleged that Suharto and his children amassed $73 billion, the bulk from oil and mining, forestry, property, banking and petrochemicals, but lost much of it during the 1997 Asian financial crisis.

The magazine, which is owned by Time Inc., the magazine publishing division of media conglomerate Time Warner Inc., alleged that the family still had $15 billion in 1999.