Secret documents leaked by US whistleblower Edward Snowden, obtained by the Australian Broadcasting Corporation and The Guardian newspaper, name the president and nine of his inner circle as targets of the surveillance.
The embarrassing details emerged with bilateral ties between the strategic allies already strained over previous spying allegations and how to deal with boatpeople heading for Australia via Indonesia.
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A list of targets also included his wife Ani, Vice President Boediono who was in Australia last week, former vice president Yussuf Kalla, the foreign affairs spokesman, the security minister and the information minister, the reports said.
Yudhoyono's office demanded an explanation from Canberra.
"The Australian government urgently needs to clarify on this news to avoid further damage," spokesman Teuku Faizasyah told AFP in a text message.
"The damage has been done," he added.
The ABC said one of the documents was titled "3G impact and update" and appeared to chart attempts by Australian intelligence to keep pace with the rollout of 3G technology in Indonesia and across Southeast Asia.
A number of intercept options were listed and a recommendation was made to choose one of them and to apply it to a target -- in this case the Indonesian leadership, the broadcaster said.
The latest release of Snowden documents comes just weeks after reports claimed Canberra's overseas diplomatic posts, including in Jakarta, were involved in a vast US-led surveillance network, which sparked an angry reaction from Indonesian Foreign Minister Marty Natalegawa.
This was followed by The Guardian reporting earlier this month that Australia and the United States mounted a joint surveillance operation on close neighbour Indonesia during 2007 UN climate talks in Bali.
In an interview with the ABC yesterday, before the latest revelations, Vice President Boediono played down suggestions of a rift with Australia, shrugging off the disputes as normal neighbourly problems.
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