The government's response to the revelation that the United States and Australia are using their diplomatic missions for spying activities has been "too timid", two parliamentarians argued today.

NONEKlang MP Charles Santiago said malaysia's response was in "sharp contrast" to other countries that were confronting the same issue.

Instead of sending a protest note, he said, the government should have followed in the footsteps of the European Union (EU) and "immediately stopped" the Trans-Pacific Partnership Agreement talks with both the US and Australia.

Santiago said the EU leaders planned to stall the Transatlantic Trade and Investment Partnership negotiations with the US following allegations that German Chancellor Angela Merkel's telephone had been tapped.

Similarly, the European Parliament has voted to freeze US access to its banking network.

"The rule of thumb is that we don't do business with enemies. We play smart. We keep away, and we certainly don't ink on dotted lines, allowing them to reign over us,” Santiago said at the Parliament lobby today.

"Neither do we threaten the sovereignty of our country by getting into a deal with them.”

NONEPKR's Bayan Baru MP Sim Tze Tsin (left) said Malaysia should get to the bottom of this matter and declare its findings to Parliament.

"Malaysia should escalate its action to the next level, by calling the US envoy to explain... and the minister in charge should present these findings to Parliament,” Sim said.

The Foreign Affairs Ministry had earlier said that US ambassador Joseph Yon has admitted that his country runs a "surveillance" programme from its embassy in Kuala Lumpur.

However, Yon claimed that the spying was only to stop terrorist activities, and that it did not infringe on individual privacy.

The Malaysian government has sent a protest note to both the US and Australian envoys on the matter.