Prime Minister Tony Abbott says Australia would never use its intelligence gathering for commercial purposes, after reports one of its spy agencies offered US counterparts information on trade talks with Indonesia.
The New York Times says the Australian Signals Directorate (ASD) offered to share with the US National Security Agency (NSA) its surveillance of an American law firm that was representing Indonesia in trade disputes with the US.
The article is based on a top-secret document obtained by former NSA systems analyst Edward Snowden and provided by an NSA liaison office in Canberra, in a monthly bulletin.
Asked about the report, Mr Abbott said: "We never comment on operational intelligence matters".
Australia did not use any intelligence it gathers "to the detriment of other countries", he told reporters in Bourke in western NSW.
"We use it for the benefit of our friends. We use it to uphold our values. We use it to protect our citizens and the citizens of other countries.
"We certainly don't use it for commercial purposes."
The New York Times reports the ASD notified the NSA that it was conducting surveillance of the talks, and offered to share the information.
Liaison officials asked the NSA general counsel's office, on behalf of the Australians, for guidance about the spying.
The bulletin notes only that the counsel's office "provided clear guidance" and that the Australian eavesdropping agency "has been able to continue to cover the talks, providing highly useful intelligence for interested US customers".
The allegations come just months after relations between Australia and Indonesia hit a low over revelations Australia had tapped the mobile phones of President Susilo Bambang Yudhoyono and his inner circle.
Indonesia late last year downgraded its relationship with Australia, suspending military and police co-operation, including in the key area of people smuggling.
Opposition leader Bill Shorten maintained Labor's bipartisan position of not commenting on security matters, but did criticise the government for Australia's deteriorating relationship with Indonesia.
"I am concerned that in the course of five-and-a-half months Tony Abbott's taken our relationship with Indonesia from hero to zero," he told reporters in Adelaide.