Australia's ambassador to Cambodia was ambushed with a champagne toast at a ceremony to upgrade diplomatic relations, the foreign affairs department insists.
Department of Foreign Affairs and Trade officials were grilled about the champagne toast during a Senate estimates hearing on Thursday, and whether it was a bad look considering Cambodia's rapid democratic decline.
Last week, the Australian and Cambodia governments signed a deal to establish senior official talks.
The Australian embassy was advised at the last minute that the local media had been invited and that there would be a champagne toast.
The embassy asked for the toast not to proceed, but Cambodian officials demanded it go ahead because they considered it an important protocol.
"It's an unfortunate juxtaposition," first assistant secretary Philip Green admitted.
"The ambassador (Angela Corcoran) was put in an invidious situation."
Mr Green denied the deal was an "upgrade" in bilateral relations with Cambodia but said it added an "extra dimension".
He insists Australia has been vocal in expressing concerns about Cambodia's human rights and shrinking democracy.
The saga over the toast has coincided with international concerns over the south-east Asian country's spiral into a dictatorship.
Cambodia's government has faced condemnation from the European Union and other countries over its moves to kneecap the opposition ahead of next year's general election.
Prime Minister Hun Sen has ruled Cambodia for 32 years.
His government has pushed to have the Cambodia National Rescue Party disbanded, and this included the arrest of opposition leader Kem Sokha.
Former immigration minister Scott Morrison was criticised for drinking champagne with his counterpart in 2014, when he signed a $55 million deal for Cambodia to resettle refugees from Nauru and Manus Island.
The deal has been considered a failure because only a handful of refugees went to Cambodia, and most have returned to their countries of origin.
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