By Indonesia correspondent George Roberts, staff
Video: Indonesian president suspends cooperation with Australia (ABC News)
Photo: Tony Abbott with Susilo Bambang Yudhoyono in September (AFP: Adek Berry)
Related Story: Joint air exercise grounded by diplomatic rift
Related Story: AFP confirms monitoring MPs' phones
Indonesian president Susilo Bambang Yudhoyono says all military and intelligence cooperation with Australia is on hold until he gets a proper explanation as to why Australian spies tried to tap his phone.
Speaking in Jakarta, an angry Mr Yudhoyono said Indonesia was suspending cooperation on people-smuggling issues, including combined maritime patrols.
And he said he was writing to Prime Minister Tony Abbott to demand an official explanation on why Australian spies monitored his phone and those of members of his inner circle, including his wife.
Mr Abbott later told the House of Representatives that he would be writing back "swiftly, fully and courteously" because "that is overwhelmingly in the interests of both our countries."
Earlier in Jakarta, Mr Yudhoyono asked why he had been targeted, saying: "We are not enemies ... it is very serious."
Indonesia-Australia alliance
"I will instruct [officials] to halt exchange of information and exchange of intelligence among our two countries," he said.
"I also instruct and request that we stop for the meantime joint training programs between Australian and Indonesian militaries - army, navy and air force, and other joint operations between those militaries.
"I instruct this to be halted for the meantime, until all this clears up.
"It is not possible that we can continue our cooperation when we are still uncertain that there is no spying towards us, spying towards our soldiers."
However, the president says he wants to maintain good relations with Australia once the issue is resolved.
"In the eyes of Indonesia - in the eyes of all of us - the people of Australia, they truly want to have a true friendship and to have a good relationship between them and the people Indonesia," he said.
But he added that a new, legally-binding "code of conduct" would be needed in order to continue cooperation in the future.
Abbott committed to relationship with Indonesia, has Shorten's support in 'Team Australia' moment
Mr Abbott used his statement to the House, shortly after Mr Yudhoyono's press conference, to again stress his "deep and sincere regret" over the embarrassment suffered by the Indonesian president.
Video: Abbott expresses 'deep and sincere regret' on Indonesia spying (ABC News)
"The president indicated that he would shortly be writing to me," he said.
"I'd like to reassure the House that I will be responding to the president’s letter swiftly, fully and courteously.
"As always, I am absolutely committed to building the closest possible relationship with Indonesia because that is overwhelmingly in the interests of both our countries."
Opposition Leader Bill Shorten said he supported Mr Abbott's stance, saying: "This is indeed a 'Team Australia' moment.
Indonesian jets pulled out of Darwin air exercise
A spokesman for Defence Minister David Johnston has told the ABC that Indonesia has pulled out of a biannual joint air exercise in the Northern Territory, which began on Tuesday.
Downer praises Abbott's discretion
The PM is wise not to offer a detailed explanation of our spying activities, says a former long-serving foreign minister.Exercise Elang AusIndo involved 90 Indonesian air force troops and five Indonesian fighter jets training with Australian forces.
But the spying revelations have brought the exercise to an end.
Several other joint exercises in coming months in Australia and Indonesia have also been cancelled or put on hold.
That includes Exercise Rhino, an annual motorised military exercise which is designed to improve inter-operability between the Australian army and the Indonesian Army, TNI.
It was to begin this Sunday in Indonesia.
President met with key ministers
Mr Yudhoyono's comments came after he met with his top government ministers and the now-recalled ambassador to Australia to discuss the state of the relationship.
Indonesia's foreign minister Marty Natalegawa had earlier announced the country is "not only reviewing our cooperation with Australia - we are actually already implementing the downgrading of our bilateral relations with Australia".
"We are not the party that is bringing this issue up. It is Australia that has brought the matter up," he added.
The spy scandal face-off
Tony Abbott's refusal to apologise over the latest spying scandal tells us a lot about his combative approach to foreign affairs, Annabel Crabb writes in The Drum.
Indonesia had previously warned that several key agreements with its southern neighbour were "at stake", and an Indonesian government minister has cancelled an upcoming trip to Australia.
The row erupted on Monday when Indonesia recalled its ambassador after documents revealed by the ABC and Guardian Australia showed Australia attempted to intercept Mr Yudhoyono's phone on at least one occasion, and monitored his calls for 15 days in 2009.
Greens Leader Christine Milne accused Mr Abbott of allowing "cheap" domestic politics on stopping asylum seeker boats to undermine the long-term national interest.
Senator Milne says she is alarmed at the quickly deteriorating relationship between Australia and Indonesia.
The Greens say Indonesia's decision to call off joint military cooperation will affect search and rescue efforts and put the lives of asylum seekers at risk.
Commuters in Jakarta respond to the spying scandal:
"First they interfered in the East Timor crisis and now they do another one. This is reopening an old wound from the East Timor separation."
"Firstly, I am in shock and feel humiliated. I feel like vulnerable, unsafe. They are smarter, they have technological advantages and it makes them able to do it."
"A little bit angry, disappointed of course. Why this can happen to our government, our country?"
