INDONESIA has demanded more money from Australia and other nations to help stem the flow of asylum seekers reaching Australian shores.
The move came as the Federal Government rejected the appeals of a Tamil girl who begged for a boatload of asylum seekers being held in Indonesia to be allowed into Australia.
The Prime Minister, Kevin Rudd, said he was unaware of the appeal and he made no apology for taking a hardline stance.
The Deputy Prime Minister, Julia Gillard, said the Sri Lankans were the responsibility of the Indonesians, while the Immigration Minister, Chris Evans, said Australia could not be expected to resettle everybody in South-East Asia seeking asylum.
Mr Rudd said Australia had to balance the humane and the hardline, but the Opposition Leader, Malcolm Turnbull, called this ''humbug''. He said none of the Sri Lankans should be allowed in and Mr Rudd was too soft.
''He's laid out the welcome mat and he's held the door right open,'' he said of Labor's abolition of temporary protection visas and the Pacific Solution.
The demands from the Indonesian Foreign Ministry's official spokesman, Teuku Faizasyah, came as Indonesian officials scrambled to find accommodation for 253 Sri Lankan asylum seekers who remain on their boat in Merak in the western Java province of Banten in defiance of pleas to come ashore.
With some of the asylum seekers late yesterday accompanying navy personnel to look at accommodation options, it appears they are resigned to ending their five-day stand-off.
''We don't have enough capacity in terms of detention facilities and we have to face this issue very quickly,'' Mr Faizasyah said. ''Already, we are at over-capacity. With this surge, and more to come in the future, we will have an even bigger problem.''
Australia relies heavily on Indonesia to repel asylum seekers, an issue of increasing political sensitivity to the Rudd Government.
While Australia's facility on Christmas Island is close to bursting, Indonesia is already facing even bigger problems housing asylum seekers.
But according to Mr Faizasyah, Indonesia needs ''the help of the international community'' to build new facilities, expand existing ones and train personnel to staff them.
While about 1700 irregular migrants have arrived by boat in Australia this year, twice as many have landed in Indonesia, often thwarted by authorities funded and assisted by Australia.
The embattled Coalition has leapt on the boat people issue, but there is a belief internally that the Opposition spokeswoman on immigration, Sharman Stone, is not tough enough and should be replaced by either Tony Abbott or Kevin Andrews. Mr Andrews, a former immigration minister, is in charge of the Coalition's policy review process.
He told the Herald yesterday some sort of temporary visa should be restored such as those the Howard government issued to the Kosovar refugees. They stayed for three months and were sent home after the war in their homeland ended.
There have been repeated breakouts by Afghan asylum-seekers from makeshift and poorly guarded detention facilities in Indonesia.