Marty Natalegawa.

Indonesian Foreign Minister Marty Natalegawa confirms that all co-operation on people smuggling has now halted. Photo: AFP

Indonesia has moved to strengthen its intelligence apparatus in response to revelations that Australia tapped the phone of its President.

As the fallout over the spy row continues to widen, Indonesian Foreign Minister Marty Natalegawa confirmed that all co-operation on people smuggling - from police information sharing to search and rescue - had now halted.

Agriculture Minister Barnaby Joyce announced on Saturday he would postpone a trip to Indonesia. It is understood the trip had been planned for some weeks but Mr Joyce has decided ''in the circumstances'' to put it off until tensions ease.

Asked about the postponed trip, Foreign Affairs Minister Julie Bishop said she would continue to work on building a strong future relationship with Indonesia.

"We are determined to achieve that,'' she said.

Prime Minister Tony Abbott said on Saturday he had written to Indonesian President Susilo Bambang Yudhoyono, but he said it would be wrong to reveal the contents of the letter before Dr Yudhoyono had received it.

''I just want to stress that as far as I am concerned one of the fundamental tasks of any Australian government, but certainly one of the fundamental tasks of my government, is to ensure that our relationship with Indonesia goes from strength to strength,'' Mr Abbott said.

Dr Yudhoyono issued a decree on Friday that means the intelligence chiefs, the country's police, military, attorney-general's department and all other public sector departments will be drawn together and meet regularly under the authority of the State Intelligence Agency to co-ordinate their resources.

The new body, to be called the Central Intelligence Committee (BIN), is a direct response by Dr Yudhoyono to his shock and sense of betrayal that Australian intelligence services were able to bug his phone and that of his wife and inner circle in 2009.

''BIN has been positioned as the co-ordinator of [all] state intelligence agencies and [the committee] will be headed by the BIN chief,'' the decree says.

According to the Jakarta Globe, the chairman of BIN, Lieutenant-General Marciano Norman, has told his agents that foreign spies operating on Indonesian soil were his priority targets. General Marciano would also boost the capacity of the intelligence service to gather information and protect Indonesia's own secrets, the newspaper reported.

The country's former spy chief, Abdullah Mahmud Hendropriyono, told Fairfax Media last week that Indonesia had both intelligence and counter-intelligence capability and that ''black intelligence'' collection was standard operating procedure.

However, he also said that leaks that exposed a country's weakness were often used by intelligence agencies to strengthen their own resources. That principle appears to apply in Jakarta after the Edward Snowden revelations.

A senior cattle industry source said if the row continued, he was worried it might affect next year's quotas for live exports from Australia to Indonesia. The source, who did not want to be named, said those quotas would be announced in the next two to three weeks.

In Bali, the police chief and the head of the country's tourism board moved to assure tourists that they were safe to visit despite widespread anger and protests and flag burning outside the Australian embassy in Jakarta.

- with Bianca Hall