Prime Minister Malcolm Turnbull says he is disappointed a detailed account of his fiery conversation with Donald Trump was leaked, but denied the US President hung up on him.
And Mr Turnbull insisted the America-Australia refugee deal will go ahead and Mr Trump had committed to honour it, even though the US President did not like the terms of the deal.
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Worst call by far: Trump
The US President abruptly ended a call with PM Malcolm Turnbull, blasting him over the refugee deal, saying it's the worst before reaffirming his thoughts in a tweet. Courtesy ABC News 24.
"The report that the President hung up is not correct . . . the call ended courteously," Mr Turnbull said, adding the pair had had a "frank and forthright" conversation.
"My job as Prime Minister is to stand up for Australia's interests . . . what I don't do is indulge in public commentary."
The Prime Minister did not deny that Mr Trump had called the refugee deal "the worst deal ever".
Mr Turnbull's comments on radio station 2GB are, in effect, a challenge to Mr Trump to honour the deal that his predecessor, Barack Obama, made with the Australian government to take 1250 asylum seekers from Manus Island and Nauru.
Just before 3pm on Thursday, Mr Trump embarrassed the Turnbull government and threw the deal into grave doubt when he tweeted "Do you believe it? The Obama Administration agreed to take thousands of illegal immigrants from Australia. Why? I will study this dumb deal!"
That tweet was issued less than two hours after the United States embassy in Australia issued a statement that said Mr Trump's decision to "honour the refugee agreement has not changed" and that pledge was re-confirmed to the State Department from the White House.
Despite Mr Trump's tweet, and apparent dislike for the arrangement, Mr Turnbull said he expected the US would follow through on it.
A bombshell report published Thursday revealed Mr Trump had described the arrangement as the "worst deal ever" and hung up on Mr Turnbull after just 25 minutes on the phone on Saturday.
Do you believe it? The Obama Administration agreed to take thousands of illegal immigrants from Australia. Why? I will study this dumb deal!
— Donald J. Trump (@realDonaldTrump) February 2, 2017
Mr Trump's Press Secretary, Sean Spicer, had said on Wednesday that the President would "honour what had been agreed upon" but that the asylum seekers would be subjected to "extreme vetting".
As fall-out from the report in the Washington Post about the tense call between the two leaders begins, Opposition Leader Bill Shorten demanded Mr Turnbull "talk straight to the Australian people. Tell us what's going on".
According to the report, Mr Trump blasted the Australian Prime Minister, boasted about his mandate and the size of his inauguration crowd and said that "this was the worst call by far" of all his calls with world leaders.
The Prime Minister on Thursday refused to disclose details of his phone call with Mr Trump, though he insisted he stood up for Australia in every forum.
"You can surely understand the reasons for that. I appreciate your interest, but it's better that these things - these conversations are conducted candidly, frankly, privately. If you see reports of them, I'm not going to add to them."
"You may wish to speculate about policies and politics in Washington, that's not my role. My job is today and every day to stand up for Australia and that's what I do."
One cabinet minister told Fairfax Media that the reported details of the fiery phone call - which the White House had initially claimed concentrated on the "enduring strength and closeness of the US-Australia relationship" in a bland official statement - were broadly accurate.
"Malcolm has stood up for Australia, he actually had a row with the President of the United States and he hasn't crowed about it, he has since gotten on with the job," the cabinet minister said, speaking on condition of anonymity.
"We are offended but as long as these people [refugees] get off Manus and Nauru, that's the main thing. I'm confident the deal will be honoured, this is part of the process. Trump is trying to get the message out that he hates the deal but can't do anything about it."
Australian government officials were shocked and blindsided by the tweet Mr Trump put out on Thursday afternoon.
The brutal question they now face is how they are going to manage the relationship when, after Mr Turnbull observed diplomatic courtesy and refused to comment on the Washington Post report, Mr Trump without warning issued a tweet that humiliates one of the US's closest allies.
Some in Canberra have speculated that Steve Bannon, Mr Trump's close and most ideologically fierce adviser, may have leaked the details about the call in order to demonstrate that even if Mr Trump eventually accepts the refugee deal, he is doing so only grudgingly and angrily.
Under the terms of the refugee deal, it is possible that the United States could honour the agreement with Australia but not actually take any of the 1250 refugees as they could be rejected during the vetting process.
The deal - to take asylum seekers currently on Manus Island and Nauru - was struck between Australia and the Obama administration and announced by Mr Turnbull in mid-November.
In the days after the phone call, Mr Turnbull said Mr Trump had agreed to honour the deal, but Washington subsequently sent mixed messages and indicated the President was still considering whether to honour it.
Mr Shorten - who had initially criticised Mr Turnbull for not standing up to the US President - demanded details about the phone call.
Labor wanted to the refugee deal to go ahead, Mr Shorten said, "but clearly President Trump and his people are saying one thing happened in this conversation, which is completely at odds with what Prime Minister Turnbull has told the Australian people".
"They both can't be right and I think it's in the interests of the Australian people for Mr Turnbull just to be straight with the people and tell us what's really going on," he said.
"If I was Prime Minister, I would want the United States to be our ally, and I'm sure that the Americans want Australia to be their ally, but if I was Prime Minister I would never just be a satellite of the United States, and it is important that Australia speaks its mind."
Senate Democrats expressed alarm at Mr Trump's rhetoric and behaviour on Thursday.
A spokesman for Maryland Senator Ben Cardin, ranking member on the Senate Foreign Relations Committee, said he was "deeply concerned" about Mr Trump's treatment of allies, including Australia.
"The United States continues to face a number of challenges and they can only be solved by working in concert with allies and partners who share our values and goals like Mexico, NATO, and Australia.
with Tom McIlroy