Marianne Kearney, Jakarta – Indonesian business leaders and politicians are privately unhappy with what they see as Malaysia's harsh treatment of illegal foreign workers in the country.

But in public, officials are quick to assure everyone that bilateral ties have not been damaged and have brushed aside suggestions that last week's detention of several Malaysian tourists in Medan was a form of retaliation for Malaysia's jailing, deportation and caning of illegal foreign workers, many of them Indonesians.

Mr Gus Mulyono, the co-chairman of the Malaysia-Indonesia Business Council, said that while business and trade links with Malaysia had not been affected by the issue, many Indonesians were annoyed by the Malaysian government's inflexible attitude.

Under tough new penalties introduced by the authorities in Kuala Lumpur, illegal workers faced a minimum jail sentence of six months and up to six strokes of the cane.

The implementation of the new laws has drawn harsh criticism from the Indonesian media and several politicians, including National Assembly Speaker Amien Rais.

Mr Gus, who also heads the Malaysia committee of Indonesia's Trade and Industry Commission, said: 'When the Malaysians needed them they were really nice to the workers. But now they have finished the Formula 1 track, the airport and other projects they just want to kick them out. "As a human being, and as an Indonesian, I am very disappointed with the attitude."

Yesterday, around 50 demonstrators burnt Malaysian flags and shouted 'Down with Malaysia' outside the Malaysian Embassy in Jakarta. The protesters demanded that Indonesia drop diplomatic ties with Malaysia until it stops implementing its harsh new immigration laws.

But Foreign Affairs Ministry spokesman Marty Natalegawa denied that ties with Malaysia have been damaged. "The Indonesian government will not adopt a revengeful attitude towards Malaysians in Indonesia because we have mutual respect for the laws of each country," he said.

He also rejected suggestions in the Malaysian press that the detention of 19 Malaysians in Medan, Sumatra, last Friday, for allegedly failing to carry their passports with them in their hotel lobby was a sign of public anger towards Malaysian citizens.

"There is no reason to believe that Malays in Indonesia are in any danger or will be threatened by anyone in Indonesia," he said. He added that relations between Indonesia and Malaysia were "robust and strong", and that the two countries were still working on a Memorandum of Understanding to deal with the labour issue.

Malaysia's Consul-General in Medan Muhammad Yusuf Abubakar also said the detention had no connection with the issue of illegal migrants and that it was safe for Malaysians to visit Indonesia.

Separately, the Foreign Affairs Ministry said it was still investigating why the 19 Malaysians – along with six Singaporeans – had been detained for several hours last Friday after police raided a hotel on the shores of the picturesque Lake Toba.

Police in Medan denied that they were targeting Malaysian tourists, saying that they were questioning all hotel guests as part of an anti-drug operation.

"So this was not an operation to detain foreign tourists. All the guests had their identity documents checked, and whoever did not carry any proof of identity was under suspicion and was taken to be questioned," said the information officer for Medan police, Mr Amrin Karim.