Sydney – Australia should not seek to have constructive relations with Indonesia at any price, Foreign Minister Alexander Downer has said amid new criticism from Jakarta.

Indonesia's Ambassador to Australia, Mr Sudjadnan Parnohadiningrat, complained that both the Howard government and the Labor opposition had politicised the asylum-seekers issue to win votes.

The ambassador said it was unfair to suggest his government was at fault over Middle Eastern asylum-seekers coming to Australia through Indonesian waters. "I have to stress that from our perspective ... we are not prepared to be used as the bogeyman," Mr Sudjadnan told the Australian Associated Press. He called for "less noisy" diplomacy by Australia.

But Mr Downer on Wednesday defended the government's handling of asylum-seekers. "Our view is we want to have a constructive relationship with Indonesia and we'll work to do that, but we have shown in government that we don't do that at any price," he was quoted as saying in the Sydney Morning Herald. He said tensions with Indonesia had arisen partly because the Howard government had been willing to stand up to Jakarta.

In a separate development, the head of Australia's navy yesterday hinted that the Howard government had embellished a story about asylum-seekers throwing their children into the Indian Ocean after video footage released by the government as proof of such actions proved inconclusive. The unprecedented comments amounted to a damaging attack on the credibility of Mr Howard's conservative government less than two days from the federal election.