Analysts and some of Widodo`s aides are also concerned that Nurmantyo is laying the groundwork for an expansion of the military`s role in civilian affairs in the world`s third-largest democracy and may have political ambitions himself.
Widodo, the first president from outside the military and political establishment, needed to move quickly to demonstrate his authority as the country`s commander-in-chief, one senior government official said.
"With Gatot, the feeling is like he`s a little out of control," he said.
Nurmantyo declared a rupture in military ties after an Indonesian officer found "offensive" teaching material while on a language training course in Australia late last year.
The material suggested that Indonesia`s Papua province should be independent and mocked the nation`s state ideology, Pancasila, according to Nurmantyo.
CAUGHT OFF GUARD
One of the officials told Reuters Widodo and others in the government were caught off guard when local media reported Nurmantyo`s announcement of the suspension in military ties with Australia.
While the general was not formally reprimanded, the official said, Widodo served him a warning during a meeting at a presidential palace in Bogor, outside Jakarta.
The meeting was confirmed by another senior government aide, who also spoke on condition of anonymity.
Nurmantyo declined requests to be interviewed and a military spokesman declined to comment on the meeting.
The senior government official said: "We suspect that Gatot is exploiting this incident for his own political agenda, his own political ambition."
"He has been making many public appearances and speeches lately," he said. "Frankly, we think many of them about proxy wars and the threat to Indonesia are absolutely ridiculous."
In one speech, Nurmantyo predicted that a food shortage in China could trigger a flood of boat-borne refugees. He told listeners he would slaughter 10 cows and dump them into the sea to attract sharks that would devour the Chinese.
One of the officials who disclosed Widodo`s meeting with Nurmantyo said the military chief`s job was safe, downplaying speculation that the general would be relieved of his duties.
"For now, we are confident that he will not betray the president or the civilian government," he said.
The Australian Broadcasting Corporation reported last week that Nurmantyo told an audience in Indonesia recently he believed the Australian military was attempting to recruit Indonesian soldiers sent to the country for training. Australian Defence Minister Marise Payne rejected the allegation.
The comments were just one example of the conspiracy theories Nurmantyo peddles as part of his `proxy war` narrative.
In a booklet released in 2015, he wrote that foreign powers were seeking to infiltrate Indonesia`s media, education system, Islamic organizations, corporations and political parties to weaken the nation, and seize control of its security apparatus and strategic industries.
Foreign powers are also trying to weaken Indonesia`s youth by trafficking drugs and inculcating a permissive culture, he wrote.
According to Al Araf, director of the human rights advocacy group Imparsial, Nurmantyo`s objectives are twofold: to promote his own political ambitions and to garner support for an expanded role for the military.
As the proxy war narrative identifies foreign powers behind a host of Indonesia`s challenges, from terrorism and drugs to even homosexuality, the implicit solution is that only the military that can solve them, said Araf.
"These are all problems due to proxy war so the military must become involved in all these problems," he added.
The military has a history of deep involvement in civilian affairs dating back to independence from the Dutch in 1945. It once enjoyed power over civil and political affairs to promote nationalism and development, but this was largely jettisoned after strongman Suharto fell from power in 1998.
In recent years, including under Widodo`s government, soldiers have been creeping back into non-military matters. In the agriculture sector, where about 40 percent of the labor force is employed, the military is now responsible for distributing fertilizer and ensuring production targets are met. Military personnel help with harvests and build rural infrastructure.
Some critics say Nuyrmantyo has cultivated links with hardline Muslims at a time of mass protests led by conservative Islamic groups.
Last July, he addressed the Wahdah Islamiyah organization, a prime mover behind huge rallies in Jakarta in November and December that alarmed Widodo`s administration.
The rallies were organized to protest allegedly blasphemous comments by Basuki "Ahok" Purnama, Jakarta`s ethnic Chinese and Christian governor who is a close ally of Widodo.
Habib Rizieq Shihab, the firebrand leader of the Islamic Defenders Front and the public figure most closely identified with the anti-Ahok rallies, has frequently praised Nurmantyo and the Indonesian military, while lambasting the police force.
Rizieq, like the military chief, warns of a looming influx of millions of Chinese nationals.
The notion of an "invasion" of illegal Chinese workers has also been at the heart of a recent surge in false anti-China stories shared on social media in Indonesia. It has so concerned President Widodo that he has called on the government to launch a "massive campaign" online to counter fake news.