(Reuters) – Indonesians burned Australian flags on Thursday over reports Australia’s spies tried to tap the phones of President Susilo Bambang Yudhoyono and his wife, plunging relations between the neighbors to their lowest point since the late 1990s.

About 200 people marched to the heavily fortified Australian embassy in Jakarta – the scene of a 2004 bombing that killed 10 people – to demand an apology over the alleged spying, which prompted Yudhoyono to downgrade diplomatic relations with Canberra on Wednesday.

Many of the protesters carried banners lambasting their southern neighbor, including one saying, “We are ready for war with Australia“.

Other protesters in the Central Javanese city of Yogyakarta burned Australian flags in a show of anger, though the demonstrations were smaller than police had expected.

Australia earlier updated its travel advisory for Indonesia, the country’s second-most popular tourist destination after New Zealand, urging citizens in the Southeast Asian archipelago to avoid protests and “maintain high levels of vigilance”.

Yudhoyono went on national television on Wednesday to announce that he was freezing military and intelligence cooperation, including over the issue of asylum seekers, which has long been an irritant in relations.

The reports that sparked the Indonesian outrage quoted documents leaked by former U.S. National Security Agency contractor Edward Snowden, suggesting Australia had tried to monitor the phones of top Indonesian officials in 2009.

Australian Prime Minister Tony Abbott has not confirmed the spying or apologized, although he has expressed regret for the embarrassment the media reports had caused Yudhoyono and his family.

Indonesia’s Coordinating Minister for Economic Affairs Hatta Rajasa told Reuters there had been little economic impact from the row. “In the area of economy and business, our cooperation is continuing,” he said. see more

source: reuters