Lindsay Sandiford, a 56-year-old British woman, has been arrested on suspicion of trafficking cocaine worth around £1.6m into Bali, where the death penalty still exists for this type of crime.
Ms Sandiford was detained on May 19 after she was found to have the 4.7kg haul in a suitcase as she arrived in the Balinese capital Denpasar on a Thai Airways flight from Bangkok.
Four other people - three Britons and an Indian national, who are thought to have been the intended recipients of the drugs - are also being questioned.
Ms Sandiford - who told authorities in Indonesia she was a housewife - could face death by firing squad if convicted.
She was pictured yesterday at a press conference in the Indonesian holiday town of Kuta, wearing an orange inmate's T-shirt, surrounded by brown packages which were cut open by a customs official.
Indonesian customs officer Made Wijaya said the drugs were found in the lining of Ms Sandiford's case after a routine X-ray screening at the airport.
'We are working hard to stop thest type of international smugglers bringing their drugs into Bali and harming our people,' Wijaya said.
'If this woman, and anyone else who is subsequently charged, is found guilty, the punishment will be the death penalty.'
Indonesia has some of the toughest anti-drug laws in the world, with traffickers put to death in the past and others facing life imprisonment.