The death penalty was formally abolished in Australia in 1985. The last Australian killed by an Australian judiciary, Ronald Ryan, was hanged in Melbourne's Pentridge Prison on February 3, 1967. To quote PM John Howard: "I have a pragmatic opposition to the death penalty based on the belief that, from time to time, the law makes mistakes and you can't bring somebody back after you've executed him. I don't think it will ever come back."

But then Bali happened. Some 202 people from 18 nations, including 88 Australians, were murdered on October 12. It was Australia's – and Indonesia's – worst terrorist attack.

Indonesian police so far have arrested 17 suspects, their investigation closely, indeed crucially, assisted by Australian officials. Unusually for Indonesian justice – and in substantial part because of the official Australian involvement in the inquiry – the evidence against the 17 seems solid. Some of the accused ostensibly have confessed. The case against the alleged bombers could begin in a Denpasar court as soon as this month. The evidence will be hard to revisit for many but for surviving victims and families of the dead, a guilty verdict will be the closure they've been seeking.

As the case builds, Jakarta has indicated it will seek nothing less than the death penalty for those accused. But a guilty verdict followed by a series of well-publicised executions – Australia's Timothy McVeigh moment if you like, and perhaps 17 of them – will also throw up profound moral dilemmas for Australians. And it will do so at perhaps the most delicate time in our recent history.

Australia is a world leader in seeking the abolition of capital punishment. Queensland was one of the first jurisdictions anywhere to abolish the death penalty, in 1922. And Australia is an active opponent of capital punishment in international forums. Canberra is a traditional co-sponsor of United Nations resolutions against the death penalty, and, as a matter of policy, makes representations on behalf of many non-Australians facing the ultimate sentence, in countries such as China, the United States and, yes, Indonesia. Indeed, were any of the Bali suspects to be arrested in Australia, Canberra would seek assurances from Jakarta that they not be executed before agreeing to their extradition.

"It's one of the bedrocks of Australian foreign policy," says a spokesperson for the Department of Foreign Affairs and Trade. "We universally and consistently oppose the death penalty, in all circumstances."

But the Bali outrage has placed Australia's law enforcement agencies in a challenging position. The speed of the case has been enabled, in part, by the technology and expertise of foreign agencies such as the Australian Federal Police. The evidence they have gathered has been integral to the investigation. Australian government agencies have been directly involved in prosecuting a case against people who likely will be put to death.

Indonesia is one of 84 nations Amnesty International describes as "retentionist", that is, retaining capital punishment on its statutes. And employing it. There are no humane niceties about how the death sentence is carried out in Indonesia. If convicted, the alleged conspirators will face a firing squad.

Often corrupt, Indonesian justice is abhorrent to many Australians. But then so was Bali. So does the scale, the bastardry, of October 12 somehow make it different now? The accused Bali bombers see themselves as Islamic footsoldiers in a jihad. Is Australia at war, and thus justified in helping to kill them?

No, says Tracey Benson of the Australian Coalition Against the Death Penalty. "ACADP does not support Indonesia's decision to seek the death penalty for the alleged Bali bombing perpetrators. Although many Australians are still stunned and shocked over the Bali incident, Australians overall do not seek retribution by death but rather life in prison without the possibility of parole."

Benson says it is "regretful that Australian government agencies may have had some impact on the trial of those responsible for the Bali bombing".

In the hard days that followed the bombings, the calls for retribution for those responsible were, understandably in the horrible context, thick on the ground in Bali. As Foreign Minister Alexander Downer laid a wreath of Australian wildflowers at the bomb site three days after the attack, a disgusted diplomat who'd been helping identify charred victims at Sanglah Hospital spat that "we should hang the bastards who did this".

Revolted by the awfulness of the devastation surrounding him, his was not an uncommon reaction in that difficult spring week. Emotions have since settled somewhat but Our Man in Kuta may well get his wish.