Indonesia has summoned Australia's ambassador to explain media reports his embassy in Jakarta was used to spy on Southeast Asia's biggest country as part of a US-led global spying network.
The chief US diplomat in Jakarta was called in earlier this week over similar allegations, while China on Thursday demanded an explanation from the US after the Sydney Morning Herald newspaper reported Australian embassies across Asia were part of the US spying operation.
News of Australia's role in a US-led surveillance network could damage relations with Indonesia, Australia's nearest Asian neighbour and a key strategic ally.
"Indonesia's Foreign Minister Marty Natalegawa has demanded an explanation from the Australian ambassador in Jakarta about the existence and use of surveillance facilities in the Australian embassy here," Indonesia's Foreign Ministry said in a statement on Friday.
"The reported activities absolutely do not reflect the spirit of a close and friendly relationship between the two neighbours and are considered unacceptable by the government of Indonesia."
The Herald said its reports were based on US whistleblower Edward Snowden and a former Australian intelligence officer.
Snowden leaks to other media have detailed vast intelligence collection by the US National Security Agency (NSA) on allies, including German Chancellor Angela Merkel, prompting protests and a US review of intelligence gathering.
'Reached too far'
In an unprecedented admission following revelations the US spied on its European allies, US Secretary of State said on Thursday that his country's US surveillance programme did go too far at times,
"In some cases, I acknowledge to you, as has the president, that some of these actions have reached too far, and we are going to make sure that does not happen in the future," he said.
Kerry said that what Washington was trying to do was, in a "random way," find ways of determining if there were threats that needed responding to.
Recent allegations and reports of widespread spying by the US National Security Agency have caused a major rift in trans-Atlantic ties.
Kerry justified the surveillance in broad terms, citing the September 11, 2001 attacks in the United States, as well as attacks in London, Madrid and elsewhere to argue that the US and other countries have had to come together to fight "extremism in the world that is hell-bent and determined to try to kill people and blow people up and attack governments."
He said US intelligence had since 2001 averted attacks with intercepts of communications.
But he acknowledged, without going into specifics, that at times it had been too much.
Kerry also sought to give assurances that such steps would not be repeated.
"I assure you, innocent people are not being abused in this process, but there's an effort to try to gather information," Kerry told a London conference via video link.