We used to be friends: Tony Abbott and Susilo Bambang Yudhoyono. Photo: Reuters
Relations between Canberra and Jakarta appear to be improving thanks to the letter Prime Minister Tony Abbott had hand-delivered at the weekend, but a senior government source said it would be some time before they were ''normalised''.
And a senior source in the Indonesian government has revealed President Susilo Bambang Yudhoyono was ''angered'' by Mr Abbott's refusal to specifically apologise for Australia's attempt to tap his and his wife's phones in 2009.
Foreign Affairs Minister Julie Bishop is on stand-by to meet her Indonesian counterpart, Marty Natalegawa, within days, amid speculation the next step in repairing the relationship will involve the ''envoys'' of the two leaders in face-to-face discussions.
However, it remains possible that special envoys rather than foreign ministers will be used.
On Thursday, Ms Bishop said that discussions were still in their early stage, but she hoped they would be a first step towards ''normalising relations'' with Indonesia.
''We're doing it in a spirit of co-operation, it's a very positive step forward,'' Ms Bishop told reporters in Sydney.
She would not comment on speculation that she had been chosen as Australia's envoy to chart a way forward, but the code of ethics was on the agenda, she added.
Awaiting the next communication from the President, Mr Abbott is set to agree to a new bilateral intelligence agreement, including a spying ''code of ethics''.
His bid to manage the diplomatic rift without direct reference to the spying claims was undermined when his Trade Minister, Andrew Robb, became the first member of the government to speak of the 2009 reports as a fact.
"It's unfortunate that this taping that took place several years ago has been made public," he told the ABC. "But it's there, it's a fact of life."
He later said he was referring to the media reports.
But in a sign of ongoing friction, a presidential spokesman has confirmed says there are no plans to return Jakarta's ambassador to Australia, Nadjib Riphat Kesoema, to his post until after the spy code of ethics was finalised.
"This process is step by step, starting with the appointment of a special envoy,'' spokesman Julian Pasha said. The timing of the ambassador's return would be ''discussed later''.
Mr Natalegawa, the Defence Minister, Purnomo Yusgiantoro, and the head of the state intelligence agency, Marciano Norman, are to appear before the foreign affairs committee of Indonesia's Parliament on Thursday to answer questions about the spying revelations.
A senior minister in Dr Yudhoyono's government has revealed the President was angered in part by Mr Abbott's response to the spying allegation.
The comments reported in newspaper Koran Tempo by Industry Minister Mohamad Suleman Hidayat suggest Mr Abbott used the same form of words - expressing regret for any embarrassment caused by the media reports about phone tapping - as those in his statements to Parliament last week.
Mr Hidayat told reporters on Tuesday the President was disappointed Mr Abbott's letter, delivered at the weekend, did not contain an apology, only a "statement of regret".
"I can confirm the President is not embarrassed, he's angry,'' Mr Hidayat said.
Dr Yudhoyono said the letter also repeated Mr Abbott's statement he would not do anything to harm the relationship, which he described as an "important" point.
Mr Abbott has proposed a security ''round table'' as a first step in recasting the intelligence agreement between the two nations.