By Kanupriya Kapoor
JAKARTA (Reuters) - Indonesia's police confirmed they had suspended cooperation with their Australian counterparts after a diplomatic rift between the neighbors, raising the possibility of a surge in asylum seekers heading to Australia from Indonesian shores.
The rift over reports last week that Canberra spied on top Indonesians is straining ties already soured by pressure from Australian Prime Minister Tony Abbott's government since it was elected in September to return asylum-seeker boats to Indonesia, which Jakarta has resisted.
Asylum seekers, many from South Asia and the Middle East, often try to reach Australia via Indonesia.
"Cooperation over people-smuggling has been stopped for now, according to the president's instructions," National Police Chief General Sutarman told Reuters in a text message late on Sunday. "Now we are still waiting for further instructions."
He declined to give details.
The diplomatic row has pushed relations between the two countries to their lowest point since the late 1990s. Reports that Australia had tried to monitor the telephones of top Indonesian officials in 2009 were based on documents leaked by former U.S. National Security Agency contractor Edward Snowden.
The police had earlier said they had not received specific instructions after President Susilo Bambang Yudhoyono announced that Indonesia was suspending military and intelligence cooperation with Australia, including on the politically sensitive issue of asylum seekers.
That cooperation involves both the military and police to monitor and prevent so-called boat people heading to Australia. But the breakdown in ties means asylum seekers will now face fewer obstacles in sailing from Indonesia.
The steady flow of refugee boats is a hot political issue in Australia, polarizing voters.
Abbott's conservative Liberal-led coalition government came to power partly on the back of a tough campaign against asylum seekers, following a relaxation of border policies by the former Labor government that resulted in a rise in the number of boats.
Australia's Immigration Minister Scott Morrison, who heads the combined asylum seeker task force known as Operation Sovereign Borders, has declined to say which, if any, operations have been affected by the withdrawal of Indonesian cooperation.
"Our efforts to stop the boats go forward, unaffected, and with great resolve," Morrison told reporters at a weekly update on border protection on Friday.
"I said this operation rests on no single partner, no single operation, no single measure ... We are at a phase in this issue where it's government-to-government and leader-to-leader."
The Australian Federal Police did not immediately respond to requests for comment on Monday.
Accusations that Canberra spied on Yudhoyono and his wife triggered anti-Australian protests in Jakarta last week and have begun to damage commercial ties, with a state-owned Indonesian firm on Friday suspending talks with Australian cattle farmers.
Indonesia is a major importer of Australian agricultural produce, such as wheat and live cattle, while Australia is Indonesia's 10-largest export market.
Abbott sent a letter to Yudhoyono over the weekend but neither side has made its contents public.
Abbott has not publicly confirmed the spying but has expressed regret for embarrassment the media reports caused Yudhoyono and his family.
Relations between Australia and Indonesia last hit a low in 1999 when Australia sent troops into East Timor to restore peace and subdue Jakarta-backed militias after Indonesia's military pulled out of the former colony.
Ties with Jakarta have improved significantly since the two countries were drawn together in response to the 2002 bombings on the Indonesian holiday island of Bali, which killed more than 200 people, including 88 Australians.
But relations have again turned increasingly prickly since Abbott took office in September, because of the spying reports and tension over the asylum seekers.
(Reporting by Jakarta bureau; Additional reporting by Lincoln Feast in Sydney; Editing by Clarence Fernandez and Jonathan Thatcher)