Refugee advocates are claiming authorities should have acted sooner to avoid Thursday's asylum boat tragedy which may have claimed as many as 100 lives.
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Hope is fading fast for as many as 100 people still missing after their boat capsized en route to Australia.
Indonesian and Australian authorities have rescued 109 people, including a 13-year-old boy, but have also pulled three bodies from the water.
Between 90 and 100 people remain unaccounted for.
Home Affairs Minister Jason Clare says aircraft over the search and rescue area had spotted more bodies but no more survivors.
''We need to brace ourselves for more bad news,'' Mr Clare said yesterday.
The boat, crowded with asylum seekers, capsized about halfway between the Indonesian island of Java and Christmas Island on Thursday afternoon.
Mr Clare revealed that the boat's crew first made a distress call to Australian authorities on Tuesday night and another early on Wednesday.
Australian officials told them to turn around and return to Indonesia, before telling Indonesian authorities of the boat's location.
A Customs and Border Protection surveillance plane spotted the boat on Wednesday afternoon but reported no visual signs of distress.
Ian Rintoul, of the Refugee Action Coalition, yesterday called for a ''full inquiry into the information that all Australian authorities had about this boat''.
Prompt action could have saved lives, Mr Rintoul said, and the lack of co-ordination between Indonesia and Australian rescue authorities was hampering rescue operations.
''This isn't the first time we've seen a lack of co-ordination between Indonesian and Australian authorities to leave boats in distress and limbo,'' he said.
Even though the capsized boat was in Indonesian waters, Australian authorities are able to respond more easily and quickly than Indonesian authorities, and should have done so, he said.
''It is absurd for AMSA [Australian Maritime Safety Authority] authorities to simply advise an asylum boat in distress to turn back to Indonesia,'' he said.
''AMSA has far greater capacity and resources to provide rescue support than Indonesia. Australia can have planes over Indonesian waters far quicker than Indonesia can mobilise patrol boats.
''Australian policies are putting asylum seekers at risk.''
Mr Clare dismissed suggestions that Australian authorities could have saved lives by acting sooner. Nonetheless, a full investigation into the incident would be undertaken, he said.
Most of the survivors were taken to Christmas Island yesterday. Three men were receiving medical treatment at the island's hospital.
The search, led by HMAS Larrakia and HMAS Wollongong and assisted by a number of merchant vessels and several aircraft, was continuing last night.
The Australian Maritime Safety Authority emphasised that the vessel was in Indonesia's search and rescue zone ''at all times''.
Asylum-seeker policy has been a hot political issue, with the government and opposition both blaming the other for an increase in boats since talks aimed at finding a bipartisan solution collapsed in January.
The government needs opposition or Greens support for a bill to underpin its Malaysian people-swap deal, which it believes would stop the boats. Opposition Leader Tony Abbott said yesterday it was not the time to reignite the political debate.
''There'll be time enough in the days and weeks ahead to talk about what policy lessons might be drawn from it,'' Mr Abbott said.
But senior Liberal backbencher Mal Washer said both parties were responsible for the political impasse that had led to the disaster.
''Somewhere in the cloud and smoke of politics of hung parliaments we got screwed up and we couldn't get the decency above the politics,'' Dr Washer told Sky News.
Dr Washer, the member for Moore in Western Australia, hinted he would consider crossing the floor to help get the government's bill through the House of Representatives.
But the bill would still stall in the Senate without wider support from the opposition or the Greens.
Independent MP Tony Windsor called for compromise.
''Surely the real issue is about saving people's lives and the best way of doing this is to discourage people from getting on a boat in the first place,'' Mr Windsor said.
The United Nations High Commissioner for Refugees said the disaster underlined the dangers of people-smuggling boat journeys.
''The UNHCR calls on Australia and countries in the region to redouble their efforts to provide safer and more secure options for people to find protection other than through these dangerous and exploitative boat journeys.'' with AAP