Indonesia has recalled its envoy to Canberra over reports that Australia spied on phone conversations of the Indonesian president, his wife and other high-ranked government officials.
The names of President Susilo Bambang Yuhoyono and First Lady Ani Yudhoyono were listed as monitoring targets in documents from Australia's spy agency leaked by NSA whistleblower Edward Snowden.
Freshly elected Australian Prime Minister Tony Abbott refused to comment on the issue but defended the country's right to gather information for national security.
"All governments gather information, and all governments know that every other government gathers information" Abbott said.
"The Australian government uses all the resources at its disposal - including information - to help our friends and our allies, not to harm them.
"My first duty is to protect Australia and to advance our nationalist interest, and I will never, ever depart from that," Abbott said.
Indonesia's Co-ordinating Minister for Politics, Legal and Security Affairs Defence, Djoko Suyanto urged Canberra to provide a public explanation and summoned ambassador Primo Alui Joelianto back to Jakarta for "consultations" on the issue.
Leaked documents from the Australian Defence Signals Directorate (now Australian Signals Directorate), published by the Australian Broadcasting Corp. and The Guardian list a number of scooping targets, accompanied by their mobile phone model.
The agency reportedly attempted to listen to the president's conversations at least once and tracked calls made to and from his Nokia handset for 15 days in August 2009.
Vice-President Boediono, his predecessor Jusuf Kalla and Former Finance Minister Sri Mulyani were also listed as targets.
The revelations "devastated" president Yuhoyono, his special adviser for political affairs Daniel Sparringa told the Sydney Morning Herald.
''Until today, President Susilo Bambang Yudhoyono has always paid special attention toward the deepening of the two countries relations. Therefore the news has devastated us," Sparringa said.
"If no serious acts are taken to immediately end the issues, it will continue to impede our countries' [relationship]."
Diplomatic tension between Australia and Indonesia rose earlier this month after other documents leaked by Snowden revealed the Australian Embassy in Jakarta was used as a hub for US intelligence scooping.