Protesters hurled eggs at the Australian embassy in Jakarta Friday, as Indonesia's former spy chief dismissed official anger at espionage allegations as an overreaction and said tapping leaders' phones was "normal".

Demonstrators in military-style uniforms gathered outside the mission to vent their anger over claims the Indonesian president's phone was tapped, hurling eggs and tomatoes at and over the wall of the compound.

"Destroy them," a speaker shouted to protesters from the nationalist group "Red and White Fighter Command", who were wearing black and red military-style outfits.

About 100 protesters were at the mission, which was heavily guarded by police, as the demonstration got under way.

Members of hardline groups the Islamic Defenders' Front and Hizbut Tahrir Indonesia were just beginning to arrive.

Jakarta has reacted angrily to reports Australian spies tried to listen to the phones of the president and his inner circle, recalling its ambassador from Canberra and suspending cooperation in the key area of people smuggling.

The row has pushed ties between the neighbours to their lowest level since Australian forces went into East Timor in 1999 as Indonesia pulled troops out of its former territory.

But A. M. Hendropriyono, who led Indonesia's national intelligence agency from 2001 to late 2004, played down the seriousness of the row, in comments likely to undermine the tough stance of the Indonesian leadership.

"For intelligence, it's normal," he told Australia's Fairfax Media, referring to the reported Australian attempts to spy on the conversations of President Susilo Bambang Yudhoyono, his wife and ministers in 2009.

"The function of intelligence is to collect as much information as possible, which is as accurate as possible. The easiest way to do that is by wiretapping," he told Indonesian news website Liputan6.com.

"Pickpockets are supposed to pick pockets."

The former army general also batted aside comments by Foreign Minister Marty Natalegawa that Indonesia would never tap the phones of Australian politicians.

Indonesian intelligence agencies had a responsibility to try to tap the phones of foreign politicians, whether they be "friend or foe", he told Fairfax.

He also criticised the angry reaction from Indonesian leaders to the scandal, telling the Indonesian news site: "I think this is an overreaction to a failed Australian intelligence operation. The reaction is a little too much."

The scandal exploded earlier this week when Australian media revealed the spying allegations, basing their reports on leaked documents from US intelligence fugitive Edward Snowden.

The documents showed that Australia's electronic intelligence agency tracked Yudhoyono's activity on his mobile phone for 15 days in August 2009, when Labor's Kevin Rudd was prime minister.

At least one phone call was reportedly intercepted.

Australian Prime Minister Tony Abbott has said he regrets any embarrassment caused but has so far refused to apologise, further infuriating Jakarta.