Australia said on Saturday it would send dozens of asylum seekers it had intercepted "to another country", in what appears to be the first implementation of a deal to process boatpeople in Malaysia.

A boat carrying 32 people and one crew member was spotted by air force aircraft off Australia's northern coast on Saturday, then intercepted by a navy vessel, Home Affairs Minister Brendan O'Connor said in a statement.

"The group will be transferred to Christmas Island pending removal to another country," he said, without specifying the country.

Prime Minister Julia Gillard's minority Labor government has been struggling to handle the flow of illegal immigrants, an emotive and politically sensitive issue, and violence has escalated in detention centres on the Australian mainland where the asylum seekers are temporarily housed.

Last week, Canberra and Kuala Lumpur announced they had agreed a deal to process asylum-seekers caught heading to Australia in Malaysia, which is not a signatory of the U.N. refugee convention.

Australia has also been in talks with Papua New Guinea about processing asylum-seekers there.

The deal has been criticised by refugee advocacy groups. On Saturday, Project SafeCom said the decision to send boatpeople overseas "marks the start of the chosen human rights crimes" of the Labor government.

"Today is a day where we ought to be ashamed of Australia as a nation, and ashamed of its attitude to boat arrivals," spokesman Jack Smit said in a statement.

Australia tries to intercept boatpeople in the Indian Ocean, detaining them on its remote Christmas Island for processing, which prevents asylum seekers gaining greater legal rights by landing on the Australian mainland.

It currently has more than 6,000 asylum seekers in detention, originating from countries including Iran, Iraq, Vietnam, Sri Lanka and Afghanistan.

The Labor government came to power in 2007 with a pledge it made good on to end the 'Pacific solution' of the former conservative government, under which asylum-seekers were processed in the Pacific island nation of Nauru.

An upsurge in arrivals since then has been blamed by the opposition on a soft government stance. A narrow election victory in 2010 and poor polls have put the government under intense pressure to take a stronger line.

Independent observers say the number of asylum-seekers reaching Australia is in fact much lower than many other countries, but it is a hot political issue which helped swing an election in 2001.

Reuters