Protests were held in Indonesia on Thursday, as anger mounts over an Australian spy agency tapping phones used by the Indonesian president and his inner circle in 2009.
A large crowd gathered outside the Australian embassy in Jakarta on Thursday, demanding an immediate apology from Prime Minister Tony Abbott.
Hundreds of riot police are in the area, some armed with tear gas. Several Australian flags have been burnt and demonstrations have also been held in the city of Yogyakarta.
On Wednesday, President Susilo Bambang Yudhoyono announced that he was freezing military and intelligence cooperation with Australia, including over asylum seekers.
The Australian embassy in Jakarta is heavily fortified and was the target of a bombing in 2004 that killed at least nine people.
The Australian government is reported to have already undertaken precautions to ensure the safety of staff at its embassy, AAP reports.
Its Department of Foreign Affairs and Trade has also updated its travel advice, telling Australians in Indonesia to avoid protests and maintain high levels of vigilance and security awareness.
Indonesia's chief security minister said on Thursday that talks about any future cooperation on asylum seekers had been suspended, disrupting the Australian government's 'turn back the boats' policy, the ABC reports.
Jakarta also pulled out of two joint military exercises with Australia that began on 15 November in West Java and were scheduled to continue until 29 November. A biannual air combat exercise between the two countries' air forces already underway in Darwin has also been cancelled.
President Yudhoyono said he had yet to receive a response from Mr Abbott about claims that the Australian intelligence service monitored his phone calls, his wife's and others close to them.
Mr Abbott has said he regretted any embarrassment caused by the revelations, but told Parliament that he would not apologise.
A member of the hacking group Anonymous Indonesia has claimed responsibility for cyber attacks on the websites of the Australian Federal Police and the Australian Reserve Bank.
They have confirmed their sites were attacked, although both say the hacker did not gain access to any sensitive information, the ABC reports.