Police and security guards waiting for protestors in front of the Australian Embassy in Jakarta. (AAP)

A protest in front of the Australian embassy in Jakarta has erupted in violence, with flags burnt and one banner calling for war.

Hundreds of demonstrators, some dressed in militia fatigues, arrived at the embassy to protest over the spying controversy.

The demonstrators arrived carrying signs with the words "Merah" meaning "red" and sprayed red paint on the front wall of the embassy.

One banner held by protesters read: "PPM, GM, FKPPI Ready!!! War with Australia."

While another had: "Even The Sky Fall, Law Must be Uphold".

A banner was hung on the overpass near the compound, demanding an immediate apology from Australian prime minister Tony Abbott.

"Indonesian People Demanding ... Australian PM Tony Abbott must immediately apology to all Indonesian people," the banner read.

"Australia must never ever try to attack the dignity of our nation."

Others called Mr Abbott arrogant.

The protest then became physical with police moving in to restrain a number of the protesters.

A paper print out of the Australian flag and the US flag have been burnt in front of the embassy.

Protesters are angry over claims Australia tapped Indonesian President Susilo Bambang Yudhoyono's phone in 2009.