Hopes were fading last night for 11 asylum-seekers, including two boys aged 13 and 14, lost at sea off the Cocos Islands.
As the search continued, the political debate escalated with Prime Minister Kevin Rudd and Opposition Leader Malcolm Turnbull trading barbs over border protection.
Mr Rudd was defiant over his Government's ''tough but humane'' asylum-seeker policies, despite Labor's two-party preferred vote falling seven points to 52 per cent and his personal approval dropping two points.
The strong poll result emboldened Mr Turnbull, who promised to turn back the tide of boats if elected and suggested he would reinstate the Howard government's border protection measures.
A prominent refugee advocate warned more boats would attempt the perilous journey from Sri Lanka in the wake of the civil war.
The warning came as the search for the remaining 11 asylum-seekers continued.
Twenty-seven Sri Lankan men, aged between 20 and 40, have been rescued by the tanker LNG Pioneer and are expected to be taken to Christmas Island.
But there are grave fears for the missing men, with search and rescue teams sighting two bodies in the water but unable to recover them.
One man has already been confirmed dead.
Home Affairs Minister Brendan O'Connor said eight aircraft as well as a Japanese fishing boat and the LNG Pioneer had been involved in the search for survivors yesterday.
''The 27 survivors will be taken to Christmas Island, where appropriate medical treatment and mental health support, including grief counselling, will be available. Their health and well-being is our first priority. Other checks, including identity and reasons for travel, will commence in due course,'' he said.
The controversy over border protection has been linked to the Government's dramatic slump in both the Newspoll and Essential Media surveys.
Liberal frontbencher Tony Abbott said the Government's policies ''encourage people to take to the sea in leaky boats''.
''... you look at this terrible tragedy that's unfolding in the Indian Ocean at the moment, and you've got to say this is a comprehensive failure and it's all the Prime Minister's fault,'' he said.
However, Mr Abbott later clarified his comments, saying he did not blame Mr Rudd for the tragedy.
As the search continued, Mr Rudd refused to comment on the polls.
''What the Government is doing is ensuring that it implements its tough, responsible but fair policy, the one that we took to the people prior to the last election, and it's the one which serves Australia's long-term interests,'' he said.
''It's tough and hardline on people-smugglers, it's humane on asylum-seekers, that is a responsible policy in the national interest.''
But Mr Turnbull said ''unpicking border protection policies'' had resulted in policy failure.
''We now have a major problem with the security of our borders and the fact is, increasingly, day by day, more and more of our immigration program, particularly our humanitarian program, is being outsourced to the people-smugglers,'' he said.
Asylum Seeker Resource Centre coordinator Pamela Curr said more boats some carrying women and children would attempt to travel directly from Sri Lanka to Australia because of the ''appalling'' situation confronting displaced Tamils in camps in both Sri Lanka and Indonesia.
''News of this tragedy has certainly reached Colombo. But it won't stop people, this isn't a Women's Weekly cruise, these people are desperate asylum-seekers,'' she said.
Ms Curr questioned the Government's handling of the rescue operation after conflicting accounts of how the boat capsized from Defence Force chief Angus Houston and Mr O'Connor.
''All we know is that these people were sitting on a boat in extreme distress as night was falling.
''When was Australia notified about this incident and why did it take so long for the Orion aircraft to get into the air?'' with AAP