Canberra – Australian political and military figures had their telephones bugged by Indonesia during the diplomatic crisis over East Timor's independence ballot in 1999, a former Indonesian intelligence chief said yesterday.

Jakarta also unsuccessfully tried to infiltrate the Australian Secret Intelligence Service (Asis), said Mr Abdullah Hendropriyono, who resigned last month as director of the State Intelligence Agency. He said the spying had stopped now.

But a former Asis officer, Mr Warren Reed, told Australia's ABC News he believed Indonesia penetrated deep inside the service. With penetration deep into the intelligence system here, they would have fished out top-grade information from Canberra, he said.

It was not just key Australian figures who were under Indonesian surveillance. The embassies of Australia and other countries in Jakarta also had their telephones tapped during the period, though Mr Hendropriyono would not disclose which other diplomatic missions were bugged.

He also admitted to spying on politicians but said he had never managed to recruit Australians to betray their country. Justifying his actions, he told the Nine Network: "We found ... evidence that our embassies abroad are tapped ... and we also do the same thing. This is quite common in the intelligence activity." Mr Hendropriyono, who was a military general before becoming Indonesia's intelligence chief in 2001, said he was angry when Australia led United Nations troops to restore order in East Timor, now known as Timor Leste, after the Indonesian province voted for independence and triggered a violent backlash from army-sponsored militias.

"The Australian intelligence tapped all conversations with Indonesian armed forces officers but also civilians," he said. "Then we made some counter-tap, counter-bugging." Asked if Australian politicians were also targets, Mr Hendropriyono said: "Politicians, yes." He declined to identify them.

But he said Indonesia no longer spied on Australia since the two countries became allies against terrorism following the 9/11 attacks on the United States in 2001.

Relations between Canberra and Jakarta hit a low in 1999 when Australia led a United Nations-sanctioned peacekeeping force into East Timor – a move which many Indonesians saw as impinging on their national sovereignty.

Prime Minister John Howard would neither confirm nor deny the claim that Australian politicians had been the targets of Indonesian telephone bugging. "I neither confirm nor deny stories about those sorts of security things," Mr Howard told reporters.

Asked if he would tell the MPs who were allegedly bugged by the Indonesians, Mr Howard replied: "I am not going to talk about any aspect about something like that." But Mr Reid insisted Indonesian spies had penetrated Australia's overseas spy network.