Contracts for the new detention camp on Nauru will be awarded shortly with work expected to commence soon thereafter, the Immigration Department says.
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The news comes as tension mounts among asylum seekers on Nauru and four boats carrying 355 asylum seekers have been intercepted since Saturday.
The 377 detainees on Nauru have been living in tents on the island, and have staged an increasingly impassioned protest, seeking to come to Australia to have their claims for asylum heard.
But there have been mixed reports about the hunger strikes engulfing the camp.
The men - who have set up a Facebook page to take their plight to Australians - and refugee advocates say 300 people are now taking part in the hunger strike.
The detainees wrote: ''In Modern Period nobody wanna like keep even domestic animal in a tent at 42 Celsius temperature for a months, but the Human being are still living in hell hole Nauru. The Asylum seekers in Nauru think once they have taken the risk of deep Indian ocean, now they will take the risk during hunger strikes, untill getting their rights till the death.''
The hunger strike entered its fifth day on Monday.
Another man, an Iranian identified by fellow asylum seekers as Omid, was up to his 25th day of hunger strike, the group said.
But the Department of Immigration has cast doubts on the men's accounts of the protest.
A spokesman said: ''[The] department knows at least 200 meals have been claimed at meal times, and large amounts of snack food throughout the day.'' It says food and water are provided at all times.