Prime Minister Tony Abbott has rebuked the ABC for publishing leaked intelligence documents, but says he has no plans to cut ABC funding.

Prime Minister Tony Abbott has publicly rebuked the ABC for publishing stories about Australia’s spy agencies, but says he has no plans to retaliate by cutting funding to the public broadcaster.

Government MPs expressed anger at the intelligence stories at a closed party-room meeting on Tuesday as the ABC’s managing director Mark Scott went on television to defend the reports.

The ABC and The Guardian last month sparked a diplomatic crisis with Indonesia when they published leaked documents showing Australia had tracked the mobile phones of Indonesia’s President Susilo Bambang Yudhoyono and members of his inner circle.

The documents included a power point presentation, leaked by fugitive American intelligence contractor Edward Snowden, who has sought sanctuary in Russia.

“I think the ABC was guilty of very, very poor judgment,” Mr Abbott told reporters, adding he was concerned the ABC helped promote a story by The Guardian, which he described as a left-wing British newspaper.

Mr Abbott said he understood why many in the media believed the ABC had an unfair competitive advantage because it received around $1 billion a year in government funding.

But he had no plans to punish the ABC by cutting its public funding.

“It has been thus (publicly funded) for many a long year, and this government has no plans to change that,” he said.

“My intention is to speak plainly and candidly with the Australian people in the hope that ABC management will see sense.”

Mr Scott earlier appeared on ABC television to defend the public broadcaster’s coverage of the intelligence leaks, which he called a “very important story”.

“Yes, it has caused some short-term difficulty but we absolutely feel it was in the public interest,” he said.

“When an important story was presented to us, were we really going to walk away from that because it was controversial?”

Mr Scott said the ABC did not have an ongoing arrangement with The Guardian on future Snowden leaks but he would not rule out further collaborations.

“It would depend on the story, and it would depend on our ability to independently verify that story, and it would depend on whether we felt that story was in the public interest,” he said.

In the past, the ABC has taken part in collaborative reporting ventures with Fairfax Media.

South Australian Liberal Senator Cory Bernardi, who raised concerns about the ABC in Tuesday’s government party-room meeting, suggested taxpayers could decide on whether ABC funding should be cut.

“The ABC seems to have made their choice. Maybe Australian taxpayers should be able to express their choice as to whether the ABC is worthy of their tax dollars or not,” he told AAP.

Defence Minister David Johnston, meanwhile, has told a closed meeting of industry and defence experts that the government was prepared for further damaging intelligence leaks from Snowden.

“We are watching with great acuity what is happening in the space. But we must assume the worst. There is no alternative for us,” Johnston told the meeting, according to The West Australian newspaper.