Indonesian President Susilo Bambang Yudhoyono says a disaster area created by a massive hot volcanic mud slide could be turned into a geological tourist attraction.

"With good layout and good concepts, we can turn this place into something useful for the community, whether as a geological tourist attraction, a fishery or for other public activities," he said in a rare visit to East Java's Sidoarjo district.

The mud slides started in 2006; some 40,000 people have been evacuated, 12 villages have been buried, 13 people have been killed and around 100,000 people are endangered by the volcanic mud. An Australian expert has estimated that it has caused 3.6 billion euros worth of damage.

The government says the volcanic mud slide was caused by a minor earthquake in Yogyakarta, about 280 kilometres away. However, earlier this year independent investigators revealed fresh evidence that gas drillers were to blame for the ongoing mud slide.

The company conducting the drilling, Lapindo Brantas has denied responsibility for the mud flow but has agreed to pay around 300 million euros compensation to around 10,000 families affected by the disaster. Many people say the money has been delayed or that they have only received partial payments. Lapindo Brantas is connected to the powerful Golkar party and Indonesia's ruling coalition government.