British DJ David Taylor smashed police officer Wayan Sudarsa in the head with the victim's binoculars after getting into a fight because Mr Taylor suspected him of having Ms Connor's missing handbag, lawyer Haposan Sihombing said.

The lawyer said Mr Taylor then hit the victim using the sharp object, a mobile phone, and a beer bottle against the back of his head.

"That is when the victim stopped struggling," Mr Haposan said. "So the point is that he regrets what he did."

On Saturday Ms Connor, 45, and her boyfriend were declared murder suspects after Mr Sudarsa's bloodied corpse was found on the beach near the Pullman Hotel in Kuta on August 17.

But Ms Connor's legal team insisted the popular businesswoman and mother of two from Byron Bay had not been involved in the killing.

They said she had tried to drag Mr Sudarsa and Mr Taylor apart as they fought.

"I'll tell you one thing. She didn't kill the victim," said Ms Connor's lawyer, Erwin Siregar, after the police interrogation on Monday night.

The couple had parted on Kuta beach to search for Ms Connor's bag in the small hours of August 17 after it went missing while they were kissing near the water.

Mr Haposan said Mr Taylor asked a person about the missing bag. "The person then answered that he was police."

Mr Haposan said the man then pushed Mr Taylor and pinned him to the ground.

According to Ms Connor's legal team, when their client saw Mr Taylor he was sitting on top of the police officer on the beach.

"She saw that David already sit on the back of this man," said lawyer Robert Khuana.

Mr Taylor called out to his girlfriend that Mr Sudarsa could be a bogus cop and ordered her to check his pockets.

"She saw (it) looks like David punched this guy. But she not remember how many times and with what," Mr Khuana said.

"When she tried separating them this man bit her arm and then her leg."

Ms Connor then left Mr Taylor and the police officer, who were still fighting.

She attempted to catch a motorcycle taxi to the police station to report the missing handbag and the altercation but the driver refused to take her because her clothes were covered in blood.

Mr Taylor then found her on the street and said to her: "I can't find your bag".

Ms Connor's legal team said Mr Taylor convinced her that the police officer had only passed out and would regain consciousness soon. The couple then walked back to Kubu Kauh Beach Inn, where they were staying in Kuta.

"She said David only told her that the officer had passed out. She was very shocked and sad (to later learn) that the victim died. She had no idea the victim ended up dead," Mr Siregar said.

Ms Connor cancelled her missing credit card but decided it was not worth the hassle of reporting the missing bag to police because it only contained 3 million rupiah ($AUD300), according to her legal team.

On Wednesday, the couple moved from Kubu Kauh Beach Inn to a homestay in Jimbaran.

Mr Haposan said on Friday Ms Connor received a phone call from a friend in Australia, who said there was a problem.

He said they then both took a scooter somewhere in Jimbaran to burn the clothes they had been wearing on the night of the murder.

They then went to the Australian Consulate in Bali where they were apprehended by police.

Monday's explanations by the pair's lawyers appear to shed light on the events of August 17, which previously had been vexed by constantly changing stories.

Mr Taylor's lawyer had initially claimed his client told him he had been bitten while trying to help a man lying in the sand.

He had also originally claimed that it was Ms Connor - not him - who had been pushed into the sand by a "bad cop", who then lay on top of her.

But the story began to unravel when Mr Haposan suspected his own client of hiding something after visiting him on Sunday.

He emphasised that under Indonesian law suspects who are not co-operative, tell convoluted stories and do not admit their guilt receive heavier punishments.

Mr Taylor had then promised to tell the whole truth on Monday.

Mr Haposan said it was unclear when the couple first became aware that Mr Sudarsa was dead.

"It is likely that they will be tried separately," he said.