Australia in refugee-swap deal with Malaysia

The governments of Australia and Malaysia have struck a deal whereby 800 asylum seekers bound for Australia would be diverted to the Asian country instead.

In return, Australia will accept 4000 "legal" migrants from Malaysia as genuine refugees.

Now Malaysia has hinted it may want Australia to accept even more refugees if the one-off, four-year exchange deal proves successful.

But critics maintain the yet-to-be-signed deal should be stopped altogether, citing Malaysia's "dire" track record when it comes to the treatment of detainees.

Under the deal, 800 asylum seekers who try to make their way to Australia by boat could be immediately taken to Malaysia to have their claims processed.

Prime Minister Julia Gillard says the deal will be a "big blow" to people smugglers.

Malaysia's high commissioner in Canberra Salman Ahmad said if successful, the deal could help provide a model for other countries to adopt.

The Australia-Malaysia deal could potentially also be expanded.

"This is a start, a one-off arrangement that we have agreed to with Australia," he told Sky News on Sunday.

"If these things work and become effective in tackling this problem, of course, at the same time we hope other countries will also join in ... If there are more than 4000 being taken by Australia it's much better if it's acceptable by Australia."

While human rights groups have criticised the government's choice of Malaysia for the deal - a non-signatory to the UN refugee convention - Mr Ahmad insists detainees will get a fair go.

"We have our own reasons for not being a signatory to the convention but, at the same time, this does not mean we don't treat refugees with respect and dignity," Mr Ahmad said.

The Australian government says it's satisfied with that assurance.

"The discussions between Australia and Malaysia have indicated the people will be processed very quickly, and then entered into the Malaysian community," Immigration Minister Chris Bowen told reporters in Sydney.

"... Malaysia has given a clear undertaking that people would be treated with dignity and respect."

But Amnesty International's Graham Thom says it is hard to believe of a country with such a record of human rights abuses against those needing protection.

"If you're looking for a country in the region that has some of the harshest policies towards refugees and asylum seekers, then you couldn't really go past Malaysia," Mr Thom told AAP.

"We're going to be wilfully sending them back to a place where they can't access legal rights, they can't access food, they can't access basic housing. These are serious concerns."

Malaysia's detention centres suffer from appalling conditions, where overcrowding, poor sanitation, heat and disease were common place, Mr Thom said.

"The fundamental question here is: why is a country that has signed up to the convention, sending refugees back to a country that hasn't?" Mr Thom asked.

Australian Greens leader Bob Brown said the idea of sending asylum seekers to Malaysia was abhorrent given its proclivity towards canings as punishment.

The opposition is also against the deal, rubbishing it as getting "five back for every one we send" and criticising Labor's general approach to border management.

The government is in talks with Papua New Guinea to re-open the Manus Island detention centre as it expands its offshore processing options.

- AAP