Prime Minister Tony Abbott has received a letter from President Susilo Bambang Yudhoyono seeking an explanation about Australia's phone tapping activity in 2009.
Mr Abbott has made a statement to parliament about the correspondence which follows claims Australian spies targeted Mr Yudhoyono mobile phone and those of his wife and some of his closest confidants.
"This morning I received the letter," he said.
"I want to assure the house that the government will respond swiftly, fully and courteously to the president's letter.
"As always, my intention is to do everything I reasonably can to strengthen the relationship which is so important to both our countries."
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Mr Abbott said he wanted Australia to remain Indonesia's trusted partner.
Mr Yudhoyono had told Australia late on Wednesday that the letter would be forthcoming.
Opposition Leader Bill Shorten said Labor continued to support the government in its efforts to improve relations with Indonesia in a timely way.
"The seriousness of this matter, or the sense of offence that our Indonesian friends are feeling, means that we must redouble our efforts to return to positive and constructive dialogue between our governments," Mr Shorten told parliament.
"We know that our relationship can recover, it can thrive, it can prosper, it must.
"Now is the time for temperate language and carefully calibrated discussions with our Indonesian colleagues."
Hundreds of riot police are on standby near the Australian embassy in Jakarta in preparation for protests over the phone-tapping claims.
Demonstrators in the Indonesian city of Yogyakarta have already burnt an Australian flag in protest over the alleged tapping as anti-Australian sentiment continues to escalate.
The warning came in the wake of Indonesia on Wednesday cutting defence ties and co-operation on efforts aimed at combating people smuggling.
Opposition Leader Bill Shorten said Labor continued to support the government in its efforts to improve relations with Indonesia in a timely way.
"The seriousness of this matter, or the sense of offence that our Indonesian friends are feeling, means that we must redouble our efforts to return to positive and construction dialogue between our governments," Mr Shorten told parliament.
"We know that our relationship can recover, it can thrive, it can prosper, it must.
"Now is the time for temperate language and carefully calibrated discussions with our Indonesian colleagues."
Hundreds of riot police are on standby near the Australian embassy in Jakarta in preparation for protests over the phone tapping claims.
Demonstrators in the Indonesian city of Yogyakarta have already burnt an Australian flag in protest over the alleged tapping as anti-Australian sentiment continues to escalate.
Indonesia on Wednesday cut defence ties and co-operation on efforts aimed at combating people smuggling.
