Geoffrey Barker – Specially modified RAAF PC3 Orion aircraft are flying electronic spy missions against Indonesia in secret operations that gravely threaten Canberra's efforts to restore relations with Jakarta.

Today's disclosure of the spy flights is a major national security embarrassment for the Federal Government which denies unauthorised penetration of Indonesian airspace by Australian aircraft.

It comes at a sensitive moment for the Prime Minister, Mr John Howard. On Tuesday, Mr Howard said he had written to the Indonesian President, Mr Abdurrahman Wahid, inviting him to make his delayed visit to Australia.

Indonesia has claimed repeatedly that Australia has been making spy flights over its territory since last year's Australian-led Interfet operation in East Timor.

A spokesman for the Defence Minister, Mr John Moore, last night again denied Australian military aircraft had undertaken intelligence collection flights involving unauthorised penetration of Indonesian airspace. The spokesman said the Government would not comment further on matters involving national security issues.

But The Australian Financial Review has learnt the RAAF Orions are monitoring Indonesian military and other communications from flights that remain in international airspace. They operate under the cover of RAAF regular maritime reconnaissance flights to the north-west and north of Australia. The secret operation is understood to have been code-named "Peacemake".

Two of the RAAF's 19 PC3 Orions, based at Edinburgh, South Australia, have been fitted with sophisticated monitoring and recording equipment by the Defence Signals Directorate to undertake the operation.

First indications of the spy operation emerged yesterday in the British magazine Flight International, which reported that Australian PC3s had been converted to operate as intelligence platforms between 1995 and 1998. The magazine said operations were continuing "at a reduced tempo".

In fact, the spy flights are hardly surprising. Australia has major security interests in events in the Indonesian archipelago from troubled Aceh in the far west to West Irian, which borders Papua New Guinea. Interest in Indonesian military activities in West Timor remains high as East Timor struggles towards full independence under the United Nations transitional authority.

But disclosure of the flights is perhaps the most embarrassing security leak since disclosures five years ago of an Australian- US electronic spying operation against the Chinese Embassy in Canberra.

Senior government sources fear disclosure of the spy flights will prompt Indonesia to take counter-measures to reduce the ability of the Orions to monitor and record Indonesian military and other communications.

Late last month two Indonesian F-5 aircraft intercepted and flew close to four RAAF F/A-18 Hornet jets and a RAAF Boeing 707 refuelling tanker on a flight between Australia and Singapore.

The Minister for Foreign Affairs, Mr Alexander Downer, attributed reports of Australian secret flights to "people who resent Australia's intervention in East Timor'. He denied there had been spy flights over Indonesia, but was silent on intelligence collection from international airspace in the region.