JAKARTA (REUTERS) - Indonesian President Susilo Bambang Yudhoyono will meet Australia's prime minister on Wednesday, Foreign Minister Marty Natalegawa said on Monday, a sign of eased relations between the neighbours.

Prime Minister Tony Abbott's visit will be the first since late last year, when often tense relations hit a new low over media revelations that Australia had spied on top Indonesian officials, including the president and his wife.

"The meeting will give a chance to both leaders to review the status of the relationship at this time," Dr Natalegawa told reporters. "The ball is in Australia's court to exlain the problem of wiretapping and asylum seekers."

Ties have also been strained over the handling of asylum seekers who attempt to sail to Australia via Indonesia. Australia has started implementing a "turn back the boats", towing back to Indonesia often leaky vessels carrying asylum seekers, a practice Dr Natalegawa criticises as "unhelpful".

Indonesia suspended military and police cooperation over preventing asylum seekers from travelling to Australia in the aftermath of the spying scandal.

Dr Yudhoyono in December presented a six-point plan for restoring good relations, including a code of conduct on intelligence matters.

Indonesia's ambassador Nadjib Riphat Kesoema, who was recalled six months ago as the diplomatic rift deepened over the spying claims, had returned to Canberra, the Sydney Morning Herald reported.