AN Australian woman faces a possible 10-year jail sentence in Indonesia after she was arrested with a small amount of marijuana.

Ms Higgs is the latest Australian nabbed under tough Indonesian anti-drug laws.

A spokeswoman for the Australian embassy in Jakarta said Ms Higgs had been visited by Australian consular officials from Bali and offered assistance.

A source close to the family said the charges were false and ms Higgs and her husband expected them to be dropped as soon as tomorrow.

Her arrest comes amid a nationwide drug crackdown in Indonesia ordered by President Susilo Bambang Yudhoyono.

A Bali court last week sentenced two Australians to death and another seven to life in jail after they were arrested trying to smuggle more than 8 kilograms of heroin from Bali to Australia.

An Australian woman has been arrested in Indonesia after being found with around 50 grams of cannabis and two small bags of seeds.

Indonesian police say the woman is 43-year-old Barbara Cathleen Higgs.

Ms Biggs was arrested by police on Sunday at a small resort hotel on the Indonesian Island of Lombok which she runs with her husband.

She has been charged and is currently being detained in a prison on the island.

She is facing a possible 10 year jail sentence.

AN Australian woman faces a possible 10-year prison sentence in Indonesia after she was arrested with a small amount of marijuana.

Ms Higgs, the manager of the Bulan Baru resort, was arrested at her house in Senggigi Beach on Sunday, where police claim they found a small package of marijuana - allegedly 50g - and a small bag of marijuana seeds.

A spokeswoman for the Australian embassy in Jakarta said Ms Higgs had been visited by Australian consular officials from Bali and offered assistance.

Lombok police yesterday confirmed Ms Higgs was still under interrogation. She faces a possible penalty of 10 years in prison for possession of narcotics.

Police Brigadier Kadek Sudeartana said Ms Higgs was suspected of possessing drugs after various members of the community reported their suspicions to the police. "She has been a target of operations for one month," he said.

Ms Higgs's husband, who also works at the resort in north Senggigi Beach, yesterday said the arrest was a misunderstanding. "It's been a mistake," he said, declining to give his name. "You'll find that by tomorrow all the charges have been dropped."

Ms Higgs and her husband have lived in Lombok since 2001. The Bulan Baru (New Moon) resort has been advertised as a "small, family-run establishment" on "a virtually deserted stretch of beach".

Senggigi Beach is popular with holidaying Australians.

The arrest followed a week of convictions and penalties in neighbouring Bali, where the two Bali Nine ringleaders, Andrew Chan and Myuran Sukumaran, were sentenced to death for heroin smuggling and seven others in the gang were given life sentences.

The arrest is the latest in a series of Australian drug arrests in Indonesia.

Last year, yet another Australian, Schapelle Corby, was sentenced to 20 years in prison for trying to smuggle more than 4kg of marijuana into Bali.

John Howard and Foreign Affairs Minister Alexander Downer have warned Australians to stay away from drugs when travelling overseas.

Additional reporting AAP