Indonesia is threatening to cut cooperation with Australia in areas such as people smuggling and disruption of terrorist attack as a reaction to reports that Canberra cooperated with Washington to conduct spying operations in its Southeast Asian neighbour.

Reports last week based on documents leaked by former U.S. intelligence contractor Edward Snowden said the joint surveillance operation by Australia and Indonesia happened during the 2007 UN Climate Change Conference in Bali.

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Australian Prime Minister Tony Abbott insisted that no Australian agency would do anything illegal, while Foreign Minister Julie Bishop declined to comment because of a long-standing practice by Canberra on intelligence matters.

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However, such explanations was not sufficient for Indonesian Foreign Minister Marty Natalegawa who replied, quoted by World News Australia Radio, "We'll have to assume that such activities are taking place and draw our own conclusion in terms of what does it mean in terms of their view of Indonesia as a partner? If Australia feels that there are ways of obtaining information other than the official one then one wonders where we are in terms of co-operation."

He added that due to the spying reports, which triggered a hacking of Web sites of 170 small Australian businesses by the group Anonymous Indonesia, it would affect Jakarta's information exchange not only with Australia but even the US.

The group posted the warning, "Stop all forms of tapping into Indonesia or we will make your Internet network destroyed."

Indonesia also joined Germany and Brazil in sponsoring an anti-spying resolution at the UN General Assembly.

The Indonesian foreign minister added, "Countries may have capacities, technical capacities, to intercept and to carry out the activity that's been reported, and information may have been gathered. But the cost, in terms of trust, in terms of the damage, that may be insulting, is something that we must all reflect on."

Meanwhile, a Pew study released on Tuesday found that 56 per cent of Americans considered its government spying on allies in an unacceptable action.

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