We have studied the optical and electrical properties of Ni/Au bilayer thin films deposited on GaN/InGaN-based light emitting diodes (LEDs) followed by annealing in air at 550 degreesC. Oxidation of Ni and intermixing of the resultant NiO with Au lead to a dramatic increase of transparency and resistivity. Metal layers with small Au:Ni ratios (<1) exhibit high resistivity which remarkably affects LED electrical characteristics, but produce high quality ohmic contacts with specific contact resistance in the low 10(3) Omegacm(2) range. Mismatch between sheet resistances of the NiO/Au layer and n-GaN layer causes current and emission non-uniformity in the LEDs. However, significant efficiency loss was only observed in large area diodes at high operation currents, where the variation of current densities across the whole device was higher than 30%. Finally, based on these findings, the optimum Ni/Au contact is proposed as the p-type current spreading layer for commercial Ill-nitrides LEDs. (C) 2002 Elsevier Science Ltd. All rights reserved.