Tonnes of hot mud - which have forced some 10,000 Indonesians from their homes - are to be dumped in the Java Sea, the government has decided.
Activists poured mud outside the welfare ministry in protest
The mud has been spurting out of a crack in the earth since May and has already submerged several villages.
Environmentalists oppose the plan saying it will endanger marine life, while others say it is the best option available.
Environmental group Greenpeace led protests in Jakarta over the leak.
Activists dumped a truck-load of mud outside the welfare ministry, and called on Welfare Minister Aburizal Bakrie to take more responsibility for the situation in east Java.
Mr Bakrie's family is linked to the company whose gas exploration work was initially blamed for the causing the problem.
The company, Lapindo Brantas, was originally accused of causing the crack.
But some scientists now believe it could have been caused by a build up of pressure under the earth - which could make it impossible to stop until it has burned itself out.
Whole villages have been lost by the flowing mud
Some 5 million tonnes of toxic mud has been disgorged since May, swamping villages including factories, schools and rice paddies.
Dams built to contain it have been breached several times in recent weeks.
The plan to dump the mud straight into the sea will not stop the mudflow, but the government hopes it will prevent it from submerging an ever-wider area, the BBC's Lucy Williamson in Jakarta says.
A spokesman for Indonesia's Association for Geology told the BBC it was a "good solution among the worst choices we have for now".
"As long as it is manageable, controllable, I think we will have to go with it, " Ridwan Djamaludin said.
Residents of eight more villages around the spill will be evacuated as a precautionary measure.
Earlier this week, six people were injured when the hot mud broke through a dam they were building near the village of Siring.