The Indonesian President has made a significant concession to Tony Abbott's demands on asylum seekers in talks in Jakarta, agreeing that Indonesia will need to make direct deals with Australia to solve the people-smuggling problem.
Until now, Indonesia's position has been that any potential policies should be dealt with at the multilateral forum, the Bali Process. Many of Mr Abbott's policies - from boat tow-backs to establishing transit ports for asylum seekers on Indonesian soil - have been considered a threat to Indonesian sovereignty.
But after meeting Mr Abbott late on Monday on his first overseas trip as Prime Minister, President Susilo Bambang Yudhoyono agreed the countries also needed to work one-on-one.
"Indonesia has striven to overcome this issue, but it would be much better if the co-operation was at the bilateral level," he said.
The statement opens the door to Indonesia making more concessions to Australian demands, though Mr Abbott and Dr Yudhoyono left tricky details for later.
Australian Immigration Minister Scott Morrison and his Indonesian counterpart, Djoko Suyanto, will meet to thrash out the details in coming weeks.
The concession comes as a senior adviser to the Indonesian Vice-President says her country does not have the legal rights to stop asylum seeker boats leaving their coast for Australia.
Dewi Fortuna Anwar, adviser to Vice President Boediono, told ABC TV on Monday there was nothing her country could do to stop boats leaving Indonesia if there were no clear violations of the law.
''Indonesia does not really have the legal right to stop boats leaving Indonesia towards Australia,'' Dr Anwar said.
''In the same way that the Australian government was not able to stop the so-called freedom flotilla from leaving Australian shores with the clear intention of trying to show their support for a separatist movement in Papua.''
Dr Anwar added her country did not regard it as a violation of their law when refugees paid people smugglers to take them overseas.
''It depends on the perspective. These people probably don't see themselves as smugglers,'' she said.
''The fishermen were paid openly by those who wished to go to Australia, and they are pretty open about it.''
Dr Anwar also criticised two of the Abbott government's plans to combat the people smuggling trade, one of which is to pay Indonesians to spy on people smugglers, the other to buy boats off Indonesian fisherman.
''I doubt very much that Indonesia would approve any other country spying on Indonesia, regardless what the purpose would be,'' she said.
''If you buy those leaky boats then the fisherman will have money to buy more boats.
''I'm not sure that will solve the problem.''
Mr Abbott also said in the presence of Dr Yudhoyono: "People smuggling is an issue of sovereignty, especially for Australia."
However, he emphasised Australia's "total respect for Indonesia's sovereignty, a total respect for Indonesia's territorial integrity".
Indonesian Foreign Minister Marty Natalegawa, who has made much of the sovereignty issue, later drew attention to these comments, saying he was "reassured".
To sweeten the people-smuggling issue, Mr Abbott announced a $15 million commitment to a new Australian Centre for Indonesia Studies, based at Melbourne's Monash University, to "build trust and understanding" between the two countries.
He also pleased Indonesia by taking an unusually tough line on protesters in Australia agitating for independence for the Indonesian province of West Papua.
"The government of Australia takes a very dim view . . . of anyone seeking to use our country as a platform for grandstanding against Indonesia. We will do everything that we possibly can to discourage this and prevent this," he said.
Being overseas made no difference to Mr Abbott's strong political campaigning against Labor. He apologised in a dinner speech for Australian ''aberrations'' in "putting sugar on the table for people smugglers" and for cancelling the live-cattle trade.
"Never again should this country take action that jeopardises the food supply of such a friend and partner as Indonesia," he said.
The high-level talks come as a key part of the Abbott government's asylum seeker policy - transfers within 48 hours to offshore detention - has been called into question by medical experts concerned that vital health checks will be sacrificed for political expediency.
At his weekly boats briefing, Mr Morrison was forced to defend the government's policy of removing people to offshore detention within 48 hours.
Medical professionals who have advised government on asylum seeker health said thorough screening, including vaccinations and X-rays, could not be achieved within two days. The former Labor government could manage only 12 days on average.
A government adviser, who cannot be named for contractual confidentiality reasons, said the Coalition policy had thrown up ''major ethical issues'' for Australia.
The Australian Medical Association's representative on the 12-member advisory group, Choong-Siew Yong, said asylum seekers, particularly children, needed to be screened for infectious diseases and developmental diseases in the same way ordinary migrant arrivals are.
Labor's immigration spokesman, Tony Burke, called on the government to release any advice it held from the Immigration Health Advisory Group.
He said a 48-hour turnaround ''flies in the face'' of everything he was told during his time as minister.
The meeting between Mr Abbott and Dr Yudhoyono also comes in the shadow of the latest asylum boat tragedy off Java, with 36 people so far confirmed drowned, and the arrival of another vessel at Christmas Island carrying 78 people.