Indonesia Begins Downgrade of Relationship With Australia Amid PM Tony Abbott's Refusal to Apologise for Phone Tapping

Due to Australian Prime Minister Tony Abbott's continued refusal to apologise for the phone tapping on several Indonesian officials, Jakarta is downgrading its relationship with Canberra, Indonesian Foreign Minister Marty Natalegawa said on Tuesday night.

He said the diplomatic row with Australia is no longer business as usual as part of Jakarta's stepped-up response to reports that Australia's spy agencies listened to the mobile phone conversations of Indonesian President Susilo Bambang Yudhoyono, the first lady and several other ministers.

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Mr Natalegawa said the review of Indonesia-Australia relationship goes beyond information exchange and intelligence, but covers the two nations' diplomatic ties in general. Among the possible impact of the review are amendments to exchange of information and cooperation on people smuggling. But it could worsen to an outright refusal by Jakarta to return asylum seekers rescued at sea.

"We still need an official explanation ... a formal response," The Sydney Morning Herald quoted Foreign Affairs Adviser Teuku Faizasyah.

"It's not advisable to maintain the status quo of not confirming or denying to these tapping incidents in the past. So we are waiting. At stake is the strategic relationship that we have established," he added.

He pointed out that Mr Abbott only addressed Australian audience when he spoke on Tuesday about the spying charges.

The PM stated he regrets the embarrassment the phone tapping caused to the Indonesian president, but he stopped short of offering an apology.

"I don't believe that Australia should be expected to apologise for reasonable intelligence gathering ... Similarly, Australia should not be expected to detail what we do to protect our country any more than other governments should be forced to detail what they do to protect themselves," Mr Abbott said.

Responding to Mr Abbott's statement, Mr Natalegawa told Channel News Asia, "I don't get it. Why would the President of Indonesia be embarrassed? ... I believe the embarrassment should belong to the government of Australia."

In Canberra, Opposition leader Bill Shorten encouraged Mr Abbott to follow U.S. President Barack Obama's example in calling German Chancellor Angela Merkel to apologise after the U.S. was revealed in leaked documents to be spying of the German leader.