Malaysia has summoned the heads of the US and Australian diplomatic missions in Kuala Lumpur over a row about an alleged American-led spying network in Asia.
According to the Malaysian foreign ministry, the reports of spying could “severely damage” relations.
It said a protest note was handed over.
China and Indonesia have already protested at the claims that Australian embassies were being used to monitor phones and collect data for the US.
Malaysian Foreign Minister Anifah Aman said “such activities are not done amongst close friends”.
Anifah Aman said his Australian counterpart, Julie Bishop, replied that it was not her government’s policy to comment on intelligence matters, but she accepted Malaysia’s concerns.
The Sydney Morning Herald (SMH) has reported that Australian diplomatic posts in Asia were being used to intercept phone calls and data.
The reports were based on an NSA document leaked by whistleblower Edward Snowden.
Australia’s Department of Foreign Affairs and Trade has declined to comment on the reports.
Australian PM Tony Abbott said: “Every Australian governmental agency, every Australian official… operates in accordance with the law.”