More than 250,000 Australians face paying up to $100 for a tourist visa to travel to Indonesia as relations between the countries take a new dip.

Indonesian authorities admitted yesterday the action was partly aimed at journalists trying to enter the country illegally. While Jakarta has long been sensitive to adverse coverage by Australian media, union criticism of its attempts to quell the West Papuan independence movement this week also brought charges of interference in Indonesian affairs. The Governor of Bali, Dewa Made Berata, made it clear he thought Australian tourists were undisciplined cheapskates – and was not bothered by the plan to revoke free visas for Australians.

"Bali will be quickly damaged if it is flooded with tourists who love partying but have no money," he said, adding that he preferred Japanese. "Aside from being large in number, the Japanese tourists usually have more money and are more disciplined than the Australians," he told the Jakarta Post.

But the Federal Government will tell Indonesia it risks seriously hurting Bali's tourist trade. About 261,000 Australian tourists travel to Indonesia – mainly Bali – every year. Under the visa proposal, they would have to visit consuls or the Indonesian Embassy and apply for a $US50 visa – close to $100 on the current exchange rate. The Foreign Affairs Minister, Mr Downer, warned yesterday that Australians would favour destinations such as Phuket in Thailand or Malaysia.

Only days after foreign countries pledged $US4.8 billion to help Indonesia overcome its chronic economic plight, anti-Western sentiment is running high in the world's fourth most populous nation. Analysts and diplomats in Jakarta are worried that Indonesian authorities are unwilling or unable to dampen anti-Western feelings, particularly against the United States.

The Indonesian visa plan is partly intended to crack down on the number of journalists visiting the country on tourist visas – the reason Australian 60 Minutes reporter Richard Carleton and his camera crew were deported last year during their coverage of the East Timorese elections. A spokesman for the Indonesian Embassy, Mr Marihot Siahaan, said journalists would have to apply for a "journalist visa" and it was hoped cases like Carleton's would not be repeated. He added that the new visa system would not only be for Australia but for all countries.

Indonesia was irritated this week at the signing of a memorandum of understanding by the ACTU and West Papuan independence leader Mr Jacob Rumbiak. The ACTU's senior vice-president, Mr Greg Sword, declined to comment yesterday after this fuelled opposition from the ALP's foreign affairs spokesman, Mr Laurie Brereton.

But Mr Sword, also ALP Federal president, referred to a speech he made on Tuesday, arguing that West Papuans were ethnically different from Indonesians and had more in common with Papua New Guineans.

But Mr Downer, in Perth yesterday, warned: "If you try to chop West Papua out of Indonesia, believe me, it will be a bloodbath." He added: "... we see the upheaval in East Timor last year and I can tell you that will look very calm and very smooth compared to any secession in West Papua."

The Indonesian Justice Minister, Mr Yusril Ihza Mahendra, announced in Canberra on Thursday that his Government was considering the new visa system. He was quoted as saying Indonesia could earn as much as $US300 million. The proposed fee compares with $60 per visa for Indonesians entering Australia.

[By Andrew Clennell, Lindsay Murdoch, Hamish Mcdonald and Brad Norington.]