AAP/Daniel Hartley-Allen

The Australian-Indonesian relationship has plummeted - with Jakarta withdrawing its ambassador because of Australia’s eavesdropping on the Indonesian President and other top figures.

The latest very detailed revelations about Australian spying in Indonesia – documenting phone monitoring at the highest level - come at the worst possible time for the Abbott government.

The Coalition has been trying to bed down the relationship. This was already made more difficult not just by the earlier disclosures about spying but also by the tug of war about boat returns, including the recent public stand off over a vessel that Australia finally had to accept after Indonesia refused to do so.

The initial disclosures about the use of the Jakarta embassy for spying, based on information from US National Security Agency whistleblower Edward Snowden, led to Indonesian please explains.

The revelations about the assault on the phones of public figures are more confronting for the Indonesians. The targets are a political who’s who, including both President Susilo Bambang Yudhoyono and his wife, and vice president Boediono, who was in Canberra last week.

AAP/Daniel Munoz

The Defence Signals Directorate (now the Australian Signals Directorate) accessed the phone activity in 2009. The activity on Yudhoyono’s phone was tracked for a fortnight in August that year and there was one attempt to listen to a conversation. The material, obtained by The Guardian and the ABC, had the DSD’s motto “Reveal their secrets – protect our own” stamped on it.

The Snowden disclosures have led to a situation where all the players are locked into inescapable lines.

The Australian government won’t confirm or deny particular spying. The Indonesians are registering their strong displeasure, which is no doubt genuine but also driven by domestic politics, especially with next year’s presidential elections approaching.

Indonesia’s Foreign Minister Marty Natalegawa declared the behaviour “violates every single decent and legal instrument that I can think of … it is nothing less than an unfriendly act which is having already a serious impact on our bilateral relations”. He said Indonesia was “not satisfied with the kind of dismissive answer provided as if this is an activity that is being carried out as a matter of course in the relations among countries.”

Indonesia has indicated that agreements with Australia could be reviewed.

The idea that Australia is spying on the leadership just inflames anti Australian feeling in Indonesia.

It makes the situation worse that the spying extended not only to a president but one who has been such a good friend to Australia.

Labor (on whose watch these particular incidents happened) is not making an issue of the latest information, but is highlighting other issues difficult for the relationship (today asking about the Coalition’s policy to buy Indonesian fishing boats).

It was left to Greens Adam Bandt to ask Tony Abbott about the tapping, whether it was still going on and whether he supported it.

Within the framework of not commenting on specifics, Abbott said:

.. “All governments gather information and all governments know that every other government gathers information.”

.. “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 the national interest.”

.. “I will never say or do anything that might damage the strong relationship and the close co-operation that we have with Indonesia, which is all in all, our most important relationship, a relationship that I am determined to foster.”

Opinion is divided about how damaging to the relationship the latest disclosure will be. One school of thought among some experts is that it will give the Indonesians greater leverage.

Greg Fealy, from the Australian National University, predicted that “this is likely to be an ongoing problem for the Abbott government”, even though the revelations went back to Labor’s time. “It is going to make Indonesian political leaders increasingly irritable about this matter.

"The longer there are headlines about Australian intelligence activities against Indonesian targets, the more that there is going to be a build up of resentment and the more criticism we can expect of Australia, not just from within government circles but particularly from within parliament.”

Bob Lowry, a longtime observer of the Indonesian military and politics, doesn’t believe the spying affair will have a fundamental effect on the Australian-Indonesian relationship. There may be some impact on co-operation on people smuggling and other areas of a “symbolic” nature that are politically sensitive to Australia, he says, but it won’t hit matters of substantial mutual interest like counter-terrorism co-operation.

Independent Andrew Wilkie, a former intelligence officer who when working with the Office of National Assessments would have seen much material gathered from our spying efforts, today applauded Snowden. “It is in the public interest that a light is shone on the way these agencies do business”.

For the politicians in Australia and Indonesia, that light has been embarrassing, provocative and unhelpful.