Labor is demanding Prime Minister Tony Abbott tell Australians why he has abruptly cancelled a trip to Indonesia, amid reports an asylum seeker operation is underway.

Mr Abbott is hoping to arrange a visit to Indonesia to meet president Susilo Bambang Yudhoyono soon, after declining an invitation to attend the Open Government Partnership conference in Bali early next week.

The invitation was seen as an attempt to try and mend relations between the two countries, which have been strained ever since it was revealed Australian spies tapped the president’s phone in 2009, when Labor was in power.

But in a statement, a spokesman for Mr Abbott said the Prime Minister is now “unable” to make it to Bali.

Although Mr Abbott gives no official explanation for cancelling the visit, government sources have told the ABC it is due to a current “on-water operation” taking place on the high seas which could cause “embarrassment” to the Indonesian president.

It is the Coalition’s policy to turn back asylum seekers where it is safe to do so, something Indonesia dislikes.

The Opposition’s foreign affairs spokeswoman Tanya Plibersek says the Government needs to make the real reason for Mr Abbott’s non-attendance clear.

“Indonesia’s an important friend for Australia, the relationship is under stress at the moment,” Ms Plibersek said.

“Rejecting this invitation at this late stage really does put extra strain on the relationship.

“It’s very important the Prime Minister discloses the reason that he’s really not going, because Australians deserve to know why he’s putting further pressure on the relationship with such an important neighbour.”

Finance Minister Mathias Cormann is providing a different explanation, saying Mr Abbott’s cancelled visit to Bali falls close to the budget, which is due to be delivered in just over a week’s time.

The date the budget is handed down is fixed every year to the second Tuesday in May.

Mr Yudhoyono’s spokesman Teku Faizasyah says the Indonesian government is “well aware” of the Australian Government’s upcoming budget and will not comment on whether or not an asylum seeker operation is taking place.