Jakarta Governor Sutiyoso also demanded an apology and claims officers entered his room without knocking to request he give evidence at an inquest into the death of an Australian-based newsman in East Timor in 1975.
An offended Mr Sutiyoso, who had been scheduled to visit Canberra after Sydney, cut short his visit and flew back to Jakarta early Wednesday.
“I really feel slighted by such treatment,” he told reporters in Jakarta.
“If there is no apology, I will deem it as arrogance on their part, and do we need to continue relations with Australia?” a visibly angry Mr Sutiyoso asked.
“The matter will quickly be settled if they admit to their mistake.”
Indonesian Foreign Minister Hassan Wirajuda had already sought and received an explanation from the Australian ambassador over Tuesday’s incident, a foreign ministry spokesman said.
The spokesman said the government was “so far” not planning to lodge a formal protest with Australia.
The inquest in Sydney is probing the death of the cameraman killed with four other Australian and British newsmen in crossfire ahead of the Indonesian military’s invasion of East Timor.
Their families insist that they were murdered and there was a cover-up by Canberra and Jakarta.
Mr Sutiyoso, a retired Lieutenant General, served in the military for three decades and was part of Indonesia’s occupation of the half-island nation.
He said he had lodged a formal protest with the New South Wales government in Sydney, where he was the official guest of Premier Morris Iemma to revive a cooperation pact between the state and Jakarta.
“If the Australian government apologises and says it was a case of negligence, then we will think of continuing our relations,” he said.
His office outlined the incident in a statement which said police entered his room using a key from staff at a harbourside hotel while he was taking a nap. His staff later met the officers about their request, which was refused.
“For the sake of safeguarding the dignity and integrity of the nation, the governor cancelled his scheduled programs, including an official visit to Canberra, the capital of Australia,” the statement said.