Indonesian media reports on Thursday said there had been some sort of explosion over the Indonesian island of Batam, near Singapore, at about 9.15am local time.
Tatang Kurnia, head of Indonesia's Transportation Safety Board, said the explosion came from a Qantas plane that had just lifted off from Singapore.
"We've been informed from Singapore that a Qantas plane overflying the area defuelled and then made an emergency landing back in Singapore," he told MetroTV.
Qantas says the plane, flying from Singapore to Sydney, experienced engine problems.
"Qantas flight QF32 was enroute from Singapore to Sydney, the number two engine has shut down, so as a precautionary measure we are taking it back to Singapore," a Qantas spokeswoman told AAP.
"It should land in about 40 minutes," she said at 1430 AEDT.
Qantas spokeswoman Emma Kearns told the AP the plane could safely fly on three engines, but that the pilot will land the plane to be safe.
Kearns said there have been no reports of injuries and that the airline has not received any reports of an explosion on board.
Police and witnesses say they heard an explosion as a commercial airliner was flying over western Indonesia and found debris from the plane scattered near a shopping mall.
Earlier, police Col Eka Yudha told Indonesia's TVOne the plane was a Qantas Airbus, which was flying from Singapore to Australia when it had to dump fuel.
He was quoted as telling the station it had made an emergency landing, but later told The Associated Press the jetliner was apparently still circling the sky.
Large pieces of debris - including panels painted white and red - were found on the Indonesian island of Batam, where witnesses reported hearing the loud bang.
The Jakarta Post website reported a loud explosion was heard at Hang Nadim airport in Batam.
Batam is in the Riau Islands province of Indonesia, located 20km off Singapore's south coast.
- AAP, AP, NZ Herald
