A prisoner exchange program in which Schapelle Corby and the Bali Nine could serve jail time in Australia is under threat.

The Australian government's decision to grant temporary protection visas to 42 Papuans this week has strained relations between Canberra and Jakarta.

Indonesia has recalled its ambassador to Australia, Mohammad Hamzah Thayeb, and Nationalist politicians have called for punitive sanctions against Australia and a cut in military ties.

Now Nationalist MP Djoko Susilo has called for a halt in negotiations to establish a prisoner exchange between Indonesia and Australia.

There had been hopes Corby and the Bali Nine could serve some of their sentences for drug smuggling in Australia after a time in their Bali jail, if the exchange protocol was created.

But Djoko Susilo, angered by Australia's decision to grant the Papuans visas, wants the exchange program shelved.

"We will stop the governments [of Indonesia and Australia] trying to swap prisoners," Djoko Susilo is quoted in Fairfax newspapers as saying.

"We are trying not to hurt the Australian people, but this is the lowest level [between] Indonesia and Australia and we want more action taken by our government against yours.

"The prisoners will stay in Indonesia - they won't do their prison time in Australia now."

Temporary protection visas have been given to 42 of the 43 Papuans who arrived on Cape York in January. The case of the 43rd asylum seeker will be determined soon, immigration officials say.

F.P.S.S - Schapelle Corby