Australia and Indonesia will create a special hotline in the wake of the phone-tapping revelations to "resolve any issues" and "avoid unintended consequences", the Australian foreign minister, Julie Bishop, has said.

Bishop met her Indonesian counterpart, Dr Marty Natalegawa, in Jakarta on Thursday, saying both had agreed to meet regularly and maintain frequent contact following the downgrading of diplomatic relations between the two nations.

The hotline would be designed to quickly resolve any issues resulting from Indonesia officially downgrading its relationship with Australia, said Natalegawa. He conceded that some aspects of the downgrade between the two nations were "being decided in a very ad hoc and not systematic way".

In November, documents leaked by the NSA whistleblower Edward Snowden showed that Australian spying authorities had attempted to listen in to the private phone calls of the Indonesian president, Susilo Bambang Yudhoyno, and had targeted nine members of his inner circle, including his wife.

Bishop reiterated Canberra's regret, first expressed by the prime minister, Tony Abbott, over the repercussions of the phone-tapping scandal revealed by Guardian Australia and the ABC.

"We regret the hurt caused to President Yudhoyono and to the Indonesian people," Bishop said. "The Abbott government will not undertake any act or use our assets or resources, including intelligence assets, in any way to harm Indonesia."

Yudhoyono has temporarily suspended co-operation with Canberra in a number of key areas, including joint efforts to combat people smuggling of asylum seekers and all joint military exercises. The Indonesian ambassador to Australia has also been recalled. Yudhoyono has laid out a six-step plan to restore relations, culminating in a binding "code of ethics" between Jakarta and Canberra.

Speaking after the press conference, Natalegawa said there was no "specific deadline or timeline" in place but "we have the six steps to be gone through, and we are now on step one".

He added: "There has been a change of behaviour now in the way [Bishop] stated deep regret over the events that led to our situation now. I think there's improvement or shift.

"I'm not saying whether I'm satisfied or not satisfied. I will report this [to the president]. It is a process to regain trust, to reclaim that level of comfort in co-operating with each other. This needs a process and it cannot be changed in an instant. Clearly, the meeting today is not harmful, the meeting is part of a contribution in relieving the relationship. But the road map remains a long way to go." Natalegawa said the Indonesian ambassador to Australia would only be returned once it served "our interests".

Bishop said she hoped any code of ethics forged between the two nations would "focus on the broad range of areas of co-operation, on the importance of this bilateral relationship, the significance of it to both countries and to ensure that we can take this relationship to the next level of trust and mutual understanding."