|Australia intercepts boatpeople in the Indian Ocean, detaining them on Christmas Island for processing [GALLO/GETTY]
Australia and Malaysia are set to finalise an agreement under which hundreds of boatpeople will be transferred to the Asian country in exchange for thousands of refugees, reports said.
Under the one-off arrangement, 4,000 asylum seekers now in Malaysia and who have already registered with the UN High Commissioner for Refugees will be re-settled in Australia over a period of four years.
In return, Australia will send 800 asylum seekers to Malaysia. The agreement is expected to be signed on Monday, according to sources close to the matter.
The deal has come under heavy criticism because Malaysia is not a signatory to the UN convention on refugees, raising questions about the treatment of the asylum seekers it has agreed to accept.
But Australia, which is battling to reduce the numbers of boatpeople arriving on its shores, hopes the policy will hurt people smugglers and stop asylum seekers from making the long and dangerous sea journey to its shores.
The Sydney Morning Herald said unnamed sources had revealed that negotiations had secured the support of the UN and the deal would be formalised in by ministers from both governments on Monday.
The Reuters news agency also quoted a source close to the matter who said "both countries will sign an arrangement to swap refugees on Monday in Kuala Lumpur".
A spokesman for Immigration Minister Chris Bowen, meanwhile, said the agreement was imminent but refused to confirm when and where it would be signed.
Australia and Malaysia struck a deal in May on handling boatpeople arriving on Australian shores, but the issue triggered criticism that the rights of refugees could be compromised.
More than 500 boatpeople have arrived in Australia since the government announced the Malaysia swap plans, and it is not known whether the agreement will apply to them or not.
The matter has become an emotive political issue for Australian Prime Minister Julia Gillard, whose minority Labor government has been struggling to handle the flow of boatpeople.
Violence has also escalated in detention centres on the Australian mainland where the asylum seekers are temporarily housed.
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. Malaysia has about 92,000 asylum seekers.